Tesla Builds Data Center in China Amid Increasing Privacy Concerns

US electric vehicle maker Tesla on Tuesday said it has set up a data center in China to store local user information as it ramps up efforts to alleviate concerns regarding privacy and customer data collection.

“All data generated from Tesla vehicles sold in the Chinese mainland market will be stored in the country,” the EV maker said in a statement on Twitter-like Weibo, adding that it would be expanding its data center network.

At the same time, Tesla announced that its development of a vehicle information query platform for car owners in China is “in full swing”, which will allow customers to access data generated from their vehicles. This will also enhance Tesla’s capacity to standardize data management and ensure data safety.

The US automaker has been facing a publicity crisis following backlash from users and officials in the world’s biggest auto market, where it makes Model 3 sedans and Model Y sport-utility vehicles at its Shanghai plant.

Reuters and Bloomberg previously reported that Chinese authorities have banned the use of Tesla cars by military and employees of state-owned firms over concerns that data from its onboard cameras could be collected and transmitted to its US servers.

In a response to the reports, founder Elon Musk denied the company would leak users’ information, telling an audience at the China Development Forum in March that “if Tesla used cars to spy in China or anywhere, we will get shut down.”

The Cyberspace Administration of China on May 12 issued a set of draft rules to ensure the security of data generated by connected vehicles in the country, including requiring operators to obtain permission from users before collecting their personal information, as well as ensuring the secure storage and accessibility of the data.

However, one customer’s high-profile protest at the Shanghai Auto show in April, along with a series of fatal accidents and battery fires in the past moths, have sparked further concerns and complaints about Tesla vehicles’ quality control and safety.

SEE ALSO: Tesla Driver Dies in Rear-end Collision with Truck in South China, Sparking Further Safety Concerns

China is Tesla’s largest market after the US, with sales in the country doubling to $6.6 billion in 2020, making up a fifth of the company’s global sales. It became the first foreign car maker approved to enter the Chinese market without a local joint venture when it signed a deal with the Shanghai government in 2018, allowing it to build its Gigafactory and produce cars locally. Yet, Tesla faces mounting pressure from domestic challengers including US-listed Xpeng, Nio and Li Auto, as well as a range of tech juggernauts including Baidu, Xiaomi and Huawei.

Tesla’s revenue reached $10.39 billion during the first quarter of 2021, up 74% from a year ago and beating analysts’ forecasts of $10.29 billion.