Tesla Not Only American Tech Company Banned From Chinese Military Complexes, Sales Unlikely To Be Affected

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China recently banned Tesla vehicles from its military complexes while citing security concerns, and this has “finance Twitter” in a bit of a tizzy. Reuters reported that Tesla vehicles can not enter Chinese military complexes due to security concerns over the cameras installed on Tesla’s vehicles.

The directive advises Tesla owners to park their cars outside the military property, according to sources that Reuters spoke with. The article noted that it wasn’t clear whether this measure is applied to all such facilities but that the move came after a government security review of Tesla’s vehicles.

Ray4Tesla, who often has a few news-related tweets about Tesla, Tesla China, and Giga Shanghai, shared his thoughts in a Twitter thread. He noted that the initial Bloomberg report about the Chinese military ban on Teslas may have spooked some people but the ban only applies to the use of the Teslas on the military complex. This is to prevent the “leaking of military secrets,” and Ray added that iPhones have also been banned by the Chinese military for the same reason. “Has it affected sales? NO.”

In 2014, The Wall Street Journal reported that China labeled the Apple iPhone as a security thread. The state-run China Central Television (CCT) labeled Apple’s iPhone location-tracking features a “national security concern.

In the broadcast, the anchor referred to a function in the Apple iOS 7 mobile operating system that records the time and location of the owner’s movements. The report cited researchers who said that anyone with access to that data could gain knowledge of China’s economic situation or “even state secrets.”

I don’t think that Tesla has anything major to worry about in the case of sales from this matter, especially since China worked closely with Tesla in setting up the factory and even allowing Tesla to fully own the factory.

Tesla was the first car factory in China that was wholly foreign-owned, meaning that it was allowed to operate without a local partner. It is also the largest overseas manufacturing investment in Shanghai, and The South China Morning Post noted that it possibly surpassed Walt Disney’s $5.5 billion spendings on the Shanghai Disney Resort.

I’m bringing that up since there has been a bit of fear, uncertainty, and doubt (FUD) clouding around the report of Teslas being banned from Chinese military complexes. It should be noted that Tesla also partnered with the government of China to set up the Gigafactory in Shanghai and this was during a trade war with the US. In other words, Tesla’s sales in China will be fine.

I don’t think Morgan Stanley’s Adam Jonas had it right when they projected that Tesla would not be selling vehicles in China by 2030.

 



 


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