Tesla cars banned by Chinese military over security threats

China’s government is restricting the use of Tesla vehicles by military staff and employees of key state-owned companies, citing concerns that data the cars gather could be a source of national-security leaks, according to people familiar with the effort.

The move follows a government security review of the electric-vehicle maker’s products, which Chinese officials said raised concerns because Tesla vehicles’ cameras can record images constantly, the people said, and obtain data including when, how and where the vehicles are being used as well as the contact lists of mobile phones synced to them. Beijing is concerned that some data could be sent back to the U.S., the people said.

Chinese leader Xi Jinping has increasingly moved the country away from foreign technology as its technological fight with the U.S. intensifies. The move appears to mirror U.S. restrictions on communications equipment made by Chinese companies including Huawei Technologies Co., the tech giant Washington has labeled a national-security threat over concerns it could spy for Beijing—allegations that Huawei denies.

Fears over how tech manufacturers handle data also underscores how the growing popularity of highly digitalized cars—loaded with cameras and sensors and with built-in connectivity letting car makers amass data—might pose new privacy and national-security risks.

Tesla Inc chief executive Elon Musk said on Saturday his company would be shut down if its cars were used to spy, his first comments on news that China’s military has banned Teslas from its facilities.

“There’s a very strong incentive for us to be very confidential with any information,” Musk told a prominent Chinese forum during a virtual discussion. “If Tesla used cars to spy in China or anywhere, we will get shut down.”

Musk urged greater mutual trust between the world’s two biggest economies, in his remarks to the China Development Forum, a high-level business gathering is hosted by a foundation under the State Council.

He was holding a discussion panel with Xue Qikun, a Chinese quantum physicist who heads the Southern University of Science and Technology.