After a breakthrough where Tesla CEO Elon Musk met with Chinese Premier Li Qiang, local Chinese authorities have removed restrictions on Tesla cars. This came after the company’s China-made vehicles successfully passed the country’s data security requirements.
China released new data security requirements for “connected vehicles” that cover cars released in 2022 and 2023. Automakers are voluntarily submitting their vehicles for inspection to ensure compliance with the rules. These requirements test whether cars anonymize facial recognition data outside the vehicle, default to not collecting cockpit data, process data inside the car, and notify users of personal information processing.
Tesla’s Compliance and Localization Efforts
Tesla was among the first batch of automakers to meet the data compliance requirements. The company localized data storage in 2021 at its Shanghai data center and passed the ISO 27001 international standard for information security after a review by third-party auditors. This diligence and commitment to data security have paved the way for Tesla’s success in meeting China’s requirements.
Despite the positive developments, challenges remain for Tesla’s driver-assist software Full Self Driving to be available in China. JL Warren Capital CEO Junheng Li expressed doubts about a supervised version of FSD being rolled out in China, citing challenges for a foreign entity like Tesla to support local operations of the software. Li pointed out that Beijing may not see strategic value in supporting FSD’s domestic rollout when there are high-quality local alternatives available.
Interestingly, Tesla is not participating in this year’s Beijing auto show, a decision that has been consistent since a protester stood on one of its cars during the Shanghai auto show in 2021. While Premier Li visited other companies at the show and emphasized the importance of innovation and demand in driving production, Tesla’s absence raises questions about its strategy in the Chinese market.
Overall, Tesla’s success in meeting China’s data security requirements is a significant milestone for the company. However, challenges remain in expanding its presence in the Chinese market, particularly regarding the rollout of its Full Self Driving software. Tesla will need to navigate these challenges effectively to capitalize on the opportunities that the Chinese market presents.
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