China Expands Tesla Bans From Military Bases To Other "Government Affiliated Venues"

At what could be the worst time possible for Tesla, the company's vehicles are facing additional entry bans in China at "government-affiliated venues", which includes meeting halls and exhibition centers, Nikkei reported this week. 

The vehicles have been restricted by "government affiliates, local authority agencies, highway operators and even cultural and exhibition centers", according to the report, which confirms that previously, the bans had only applied to military bases. 

One local, talking about the Grand Halls in the heart of the North Bund district in Shanghai, told Nikkei: "If you have a meeting there, the meeting organizer will actually give you notice ahead of time and ask that you don't drive or hire a Tesla car. You cannot enter the venue with a Tesla car."

Some Chinese cities hosting large sports events are also increasing restrictions on Tesla vehicles, Nikkei said. The vehicles were recently blocked on some roads in Chengdu, which hosted the World University Games last summer.

One Chongqing resident posted online that they had been targeted for their Tesla downtown: "We were asked not to turn left and told not to drive on the route we planned just because we were driving a Tesla car."

Last summer, Tesla faced scrutiny in China over data security concerns, particularly with its "sentry mode" feature. This led to Tesla cars being banned from a Yueyang, Hunan province airport. To address these issues, Tesla established a local data center in China in August 2023, ensuring all vehicle data remains within the country. Additionally, Tesla clarified that the data collected by sentry mode is stored locally and cannot be accessed remotely.

Abhilash Gupta, an analyst with Counterpoint, told Nikkei: "While national security complexities persist, these issues are likely to have minimal impact on Tesla's competition with local players, given the company's established reputation and proactive approach in addressing security challenges."

Despite this, Tesla looks to be forging forward in China. In late December we wrote that the EV-maker was launching a new mega factory project in Shanghai that would be designed to manufacture 10,000 megapacks per year. 

The packs are designed for large-scale energy storage and efficient renewable energy distribution, and will be available for global sales.10,000 Megapack units annually equates to about 40GWh of energy storage capacity.

Located in the Lingang area of the Shanghai Pilot Free Trade Zone, the facility is slated to begin construction early this year and commence operations by the end of that year, the report says. 

However, as we noted earlier this month, despite price cuts, competition globally and in China is ramping up: BYD has surpassed Tesla in full electric vehicle deliveries for the first time ever in Q1 2024. 

The company said it produced more than 3 million new energy vehicles for the year and it marks the second year that BYD has beat out Tesla in total production. BYD produced 1.6 million battery only vehicles, just slightly behind Tesla, and 1.4 million hybrids.