Tesla caught in the crossfire of a brewing tech Cold War with China

Musk has rebuffed those fears, insisting that if the electric car company was used to spy by any nation it could be shut down. “There’s a very strong incentive for us to be very confidential with any information,” he told a prominent Chinese forum.

Dan Ives, an analyst at investment firm Wedbush, says: “With a brewing Cold Tech War between the US and China, Tesla remains caught in the crossfire.”

Experts and veterans of the Chinese auto industry say Musk will need to work hard to ensure his automotive behemoth does not become an inverse case of Huawei, the Chinese tech giant that has had its ambitions battered by similar security concerns from the US government.

“If I’m Tesla, I would find it disconcerting,” says Michael Dunne, head of the Chinese-focused automotive consultancy ZoZo Go, who lived and worked in China from 1990 to 2016. He describes the move as a shot across the bow – or, as one Chinese idiom would have it, “showing a little colour”.

Chinese officials would already have known that Tesla cars are constantly recording video from their eight exterior cameras, as well as collecting real-time data on location, speed, cabin temperature, air bag use and battery charging. So why object now?

“One has to come away with the conclusion that this is politically motivated,” says Dunne. “In my experience, this is a reminder to foreign companies that no matter how well you’re doing, don’t forget who’s in charge.”

It is a marked change from what Dunne calls China’s previous “red carpet” approach, which saw the Giga 3 facility approved and built in “record time” with 9bn yuan (£1bn) loaned by state-backed banks.