“There’s a very strong incentive for us to be very confidential with any information,” the billionaire said Saturday at the China Development Forum, an annual conference organized
by a unit of the government’s State Council. “If Tesla used cars to spy in China or anywhere, we will get shut down.”
Just hours before he spoke, Reuters
reported that China’s military had banned Tesla vehicles from entering its complexes, expressing concerns over cameras equipped onboard.
Speaking via video call on Saturday, Musk compared the controversy to the one that troubled TikTok
last year, a company he said didn’t receive “trust.” The ByteDance-owned app faced a potential ban
in the United States last year on alleged national security grounds.
“The United States wanted to shut down TikTok. Luckily, it did not happen,” Musk said. “Many people were concerned about TikTok. But I think this kind of concern is unnecessary, and we should learn lessons from it.”
Tesla has made a big splash in China in recent years, particularly after it built its Shanghai Gigafactory. In 2019, the company began making cars
there to bolster its presence in the world’s largest auto market, with Musk even calling the plant a “template for future growth.” The company managed to retain complete control
of the project, which was unusual at the time. And it has enjoyed strong government support in recent years.
But the American carmaker has also attracted scrutiny from regulators recently, leading some observers to wonder whether its special relationship with officials is over. Last month, Tesla was summoned
by Chinese officials to face questions about the quality of its Shanghai-made cars.
According to a report The South China Morning Post
on Saturday that cited an anonymous source, the military ban was issued a “couple of weeks ago” because Chinese leaders had become “very concerned” about the company’s vehicles. The newspaper went on to add that Musk may visit China next month, citing the same source.
China is critical to Tesla’s global strategy, and “remains the linchpin” that justifies a higher stock price for Tesla in the coming years, according to Dan Ives, managing director of equity research at Wedbush Securities.
That’s why over the last few days, Wall Street has been “laser focused on any actions from Tesla [or] Musk in response to this poker move,” Ives wrote in a note to clients Sunday.
“We believe this statement … was important for Tesla and Musk to make directly to the Chinese and the government in Beijing given the strategic importance of its [electric vehicle] ambitions within China,” he added.
“With a brewing Cold Tech War between the US and China” he said that Tesla and others “remain caught in the crossfire and ultimately Musk needed to draw a clear line in the sand.”
— Shanshan Wang contributed to this report.