Musk makes surprise visit to Beijing as Tesla’s China-made cars pass data security rules

BEIJING — Local Chinese authorities have removed restrictions on Tesla cars after the company’s China-made vehicles passed the country’s data security requirements, the automaker said Sunday.

The breakthrough came as Tesla CEO Elon Musk arrived in Beijing for an unexpected meeting with Chinese Premier Li Qiang, amid the first major auto show in the city in four years.

Although Tesla’s electric cars are some of the most popular vehicles in China, they have reportedly been banned from some government-related properties due to concerns about what data the U.S.-based automaker can collect.

Tesla’s news release did not specify which local authorities had removed restrictions on the cars. The Biden administration earlier this year announced an investigation into whether imported cars from China pose national security risks due to their ability to potentially collect data about the U.S. and send it back to China.

Tesla’s vehicles were not the only ones that passed the data security rules.

In addition to Tesla’s Model 3 and Model Y, several new energy vehicles from BYD, Lotus, Nezha, Li Auto and Nio passed China’s data security requirements, the China Association of Automobile Manufacturers and the National Computer Network Emergency Response Technical Team/Coordination Center of China said Sunday.

The new data security requirements for “connected vehicles” were released in November and cover cars released in 2022 and 2023 which automakers voluntarily submit for inspection, the center said.

The rules test for whether the cars anonymize facial recognition data outside the vehicle, default to not collecting cockpit data, process that data inside the car and prominently notify users of personal information processing. Tesla was included in the first batch of automakers that met the data compliance requirements.

Tesla said in its news release that it 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.

Musk’s visit to China on Sunday also raised expectations that Tesla’s driver-assist software Full Self Driving would soon be available in the country.

However, JL Warren Capital CEO and Head of Research Junheng Li said on X that the rollout of a “supervised” version of FSD in China is “extremely unlikely.”

She pointed to challenges for Tesla to support local operation of the software as a foreign entity in China. Li said there’s “no strategic value” for Beijing to support FSD’s domestic rollout when there are many high-quality local alternatives, such as Xpeng’s driver-assist software.

Premier Li visited Xpeng and other companies at the Beijing auto show on Sunday, and called for innovation and demand to drive production, according to state media.

Tesla is not exhibiting at this year’s auto show, as has been the case since a protester stood on one of its cars during the auto show in Shanghai in 2021. The show alternates between Beijing and Shanghai on an annual basis, and wasn’t held in 2022 due to the Covid-19 pandemic.