Own a Tesla? Get ready for probe: Chinese state bodies turn the heat on

Tesla is wading through stormy waters in China, the world's largest automobile market, and a shoreline remains beyond sight. With suspicions that on-board cameras in Tesla vehicles may capture sensitive data at key installations and send these out beyond China, the US-based EV maker has come under increased scrutiny despite CEO Elon Musk's assurances. And although Tesla has set up a China site to store data locally, it hasn't been enough for some local governments in the country to review vehicle ownership among staff members.

Bloomberg has reported that officials in Zhejiang and Guangxi provinces have told government bodies to look into employees who may have bought a Tesla vehicle. In some extreme cases, it is reported that staff members have been instructed to not drive their Tesla vehicles to certain designated areas which are deemed sensitive zones.

A Tesla owner, wearing a t-shirt that reads Brake Lost Control, was dragged away from the venue and detained for five days for her protest during the Shanghai Auto Show.

It is further reported that the China Meteorological Administration, with its HQ in Beijing, has appealed to staff members not to buy Tesla vehicles. Those who may already have one have been told to transfer ownership to someone else.

In a country and automobile market where options are galore when it comes to battery-powered cars, these developments are likely to detrimentally impact Tesla's prospects. Tesla does have quite a fan following in China and enjoys solid sales volumes despite the presence of major local and global players. That said, the heat is clearly on.

While Tesla hasn't specifically reacted to reports of employees being requested/warned/prohibited against their vehicles, it has repeatedly held that not only do its cars not collect any sensitive data, these are also safe to drive. The safety aspect is another key issue as a number of crashes involving Tesla vehicles, apart from quality concerns, have been brought to the spotlight in recent weeks and months.

China is an absolutely crucial market for global auto giants and specially for Tesla, a company that opened its first plant outside of the US, in Shanghai, in 2019 and this facility manufactures models not just for Chinese buyers but for several European markets as well.