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Tesla Opens Data Center in China to Comply with Cybersecurity Law for Foreign Companies

A man is inside a Tesla Model 3 car while a salesman talks to him in a Tesla shop in a shopping mall in Beijing on May 26, 2021.

A man is inside a Tesla Model 3 car while a salesman talks to him in a Tesla shop in a shopping mall in Beijing on May 26, 2021.
Photo: Nicolas Asfouri / AFP (Getty Images)

Electric vehicle company Tesla will open a data center in Shanghai, China to store data collected from its customers ’vehicles in the country and stay on the right side of Beijing’s cybersecurity laws, according to a new report from u South China Morning Post. All data that foreign companies collect in China on their customers must be kept in China in order to comply with a strict law on data approved in 2017.

“We have set up a data center in China to store data locally–collected from Tesla vehicles sold in mainland China–and add more. All data generated from cars sold in mainland China will be saved in China, ”Tesla wrote on the social media application Weibo, sometimes known as China’s Twitter version.

Apple has recently built its own data center to adhere to the same law for Chinese users of its iCloud storage service, the South China Morning Post notes. This move has provoked criticism from before human rights groups that one worry that it gives the Chinese government too much access to the iCloud data of Chinese users – data that had previously been requested by a U.S. court order when iCloud keys were stored on American soil.

Tesla has developed in China, the largest electric car market in the world, in 2019 but has been under increased scrutiny in the country in recent months. Customers in China have expressed safety concerns, even during a highly publicized show at the Shanghai Motor Show last month when a protester was standing on a Tesla Model 3 while shouting, “Tesla brakes fail.”

Chinese officials have also drawn attention to concerns that the U.S.-based car manufacturer could transmit sensitive visual data to the U.S. through its imaging capabilities. Elon Musk, CEO of Tesla, denies all espionage concerns by Chinese officials, but this has not stopped Beijing from banning all military personnel from using Tesla vehicles. back in March.

The United States and China have been fighting for alleged espionage by both sides, with U.S. officials warning of potential threats from Chinese companies such as Huawei, which has historic ties to the Chinese military. The social media platform TikTok has also been subjected to scrutiny for its vulnerabilities, including Beijing’s access to customer data. But China has its own concerns about how American companies operate on their ground, and Tesla has been just the latest target of Beijing’s wrath.

Tesla has a few reasons to be worried after investing a lot of money in China, especially after sales have slowed recently. Gordon Johnson, CEO of GLJ Research, told CNBC on Monday that other car companies like it Ford they now produce electric vehicles with better battery capacity for the same amount of money.

“April is the first month of this.” [financial] year, they were completely eviscerated in China, ”Johnson said said of Tesla, indicating that its sales fell 66% month-over-month.

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