China lifts entry ban on Tesla cars as Elon Musk woos global No. 2 market for his EVs

Tesla Model 3 Performance
Tesla Model 3 Performance, launched on April 23. Screenshot courtesy: X/@Tesla

In a big relief for Tesla, its vehicles have passed the key test of compliance with China’s data security rules. The company’s billionaire CEO Elon Musk had air-dashed to Beijing on Sunday to meet Premier Li Qiang, in order to woo the global second-largest market for his electric vehicles (EVs).

Musk pressed for an “all-clear” approval for Tesla cars, which faced stiff competition from local rivals. In recent months, Tesla had faced entry bans in Chinese government-affiliated buildings, besides military bases, due to security concerns over data leaks.

Yesterday, Tesla “passed” the security assessment by a state-owned Chinese industrial association.

The China Association of Automobile Manufacturers (CAAM) and the National Computer Network Emergency Response Technical Team/Coordination Centre of China have published a list of 76 models of intelligent connected vehicles that meet the country’s auto data security requirements, including those from Tesla.

Tesla Model 3 Performance on the road
Tesla Model 3 Performance on the road. Photo courtesy: X/@Tesla

The list was released after security tests jointly conducted by the two organisations clearing models of local Chinese electric vehicles, including Li Auto, Lotus, Hozon New Energy Automobile, and NIO, besides BYD and Tesla, state-run Xinhua news agency reported.

In tests starting in November 2023, cars were assessed to see if they met four compliance requirements:

  • the anonymisation of facial and other information from outside the car;
  • the default non-collection of in-car data;
  • the in-car data processing; and
  • the conspicuous notification of personal information processing.

The tests were carried out according to related laws and standards, and the carmakers submitted their models voluntarily, according to the Association.

The Association said that the test aimed to help regulate auto data processing, protect the rights of car users, and build a sound environment for auto data security and the industry.

Significantly, Tesla was included in the list, which was released right after Musk flew to Beijing on a surprise visit.

This was Musk’s second visit to China, which is Tesla’s second-biggest market. Built and put into operation in 2019, the Shanghai factory, Tesla’s first Gigafactory outside the United States of America, delivered 947,000 vehicles in 2023, which was 33 per cent more than in 2022.

Tesla manufacturing unit
A manufacturing unit for Tesla EVs. Photo courtesy: X/@Tesla

Reports had said that Tesla vehicles faced restrictions in China in an increasing number of meeting halls and exhibition centres across the country, besides military bases.

Even highway operators, local authority agencies, and cultural centres reportedly began restricting the Tesla EVs, which began impacting its sales in China.

Musk arrived in Beijing on Sunday at the invitation of the China Council for the Promotion of International Trade. Tesla was already in negotiations with the Chinese authorities about the lifting of all restrictions, the state-run China Daily reported.

Tesla said in a statement that the endorsement of its Model 3 and Model Y vehicles assembled at the Shanghai Gigafactory would lead to an easing of restrictions on its cars’ access to certain state-backed entities, airports and motorways.

“The result of the review will give Tesla car owners and other fans of its cars a lot of confidence in driving them on the streets of China,” said Chen Jinzhu, CEO of the consultancy Shanghai Mingliang Auto Service.

“Since the CAAM is a government-backed auto industry association, the review certainly will have an influence on relevant authorities’ policymaking,” Chen told the Hong Kong-based South China Morning Post.

The endorsement also bodes well for China’s probable approval of Tesla’s Full Self-Driving (FSD) system, its autonomous driving software, for which Musk reportedly is lobbying.

Premier Li said that Tesla’s operations in China represented a successful example of an economic tie-up between China and the US, as he encouraged more co-operation between the two countries.

Musk’s visit to Beijing aims to bring the Texas-based carmaker’s autonomous driving technology to China amid intensified competition with local competitors in an EV market that accounts for about 60 per cent of global sales, the Post reported on Sunday.

Calling Tesla’s development in China a successful example of trade co-operation between Beijing and Washington, Premier Li Qiang expressed the hope that the US would work in the same direction as China to promote the stable development of bilateral ties.

China’s huge market would always remain open to foreign enterprises, he emphasised.

Musk said thanks to the hard work and wisdom of the Chinese team. He said that it was “good to see electric vehicles making progress in China”, and added that “all cars will be electric in the future”.

According to China Daily, the country’s new energy vehicle sales surged 37.9 per cent year-on-year to about 9.5 million last year, accounting for more than 60 per cent of the global total.