Tesla, Will It Be Possible to Export Autonomous Driving Data from China?

Shanghai, regarded as the economic capital of China, has announced a 'whitelist' of companies operating in the free trade zone that are allowed to transfer cross-border data without approval. This is expected to apply to companies like Tesla, which recently passed the data security inspection marking the starting point for the introduction of fully autonomous driving functions in China.

Tesla Gigafactory in Shanghai, China [Image source=AP Yonhap News]

According to the South China Morning Post (SCMP) in Hong Kong on the 18th, the day before, the Lingang Free Trade Zone authorities in Pudong District, Shanghai, posted a list of 64 types of 'general data' on Weixin (WeChat) that can be transferred overseas without regulatory approval. Priority was given to intelligent connected cars, public funds, and biopharmaceuticals. As a result, Shanghai became the first city in mainland China to establish specific rules to promote the overseas flow of general data.

The Lingang Free Trade Zone was established in 2019 under the direction of Chinese President Xi Jinping. Last October, Shanghai launched an international data economy industrial park within the Lingang Free Trade Zone, housing 25 data-related companies. The recent measure appears to be part of the Chinese authorities' efforts to attract more foreign companies and foreign investment.

Shanghai has classified data within the Lingang Free Trade Zone into three types: general data that can be freely transferred overseas, important data that can be transferred after passing security review by authorities, and core data subject to the strictest review and required to be stored within China. The inclusion of intelligent connected cars as general data eligible for free transfer suggests that companies like Tesla could benefit. Tesla currently operates a Gigafactory in the Lingang Free Trade Zone.

User-generated data in China is a crucial element for Tesla in developing autonomous driving algorithms. Tesla also participated in a task force (TF) that created the whitelist, alongside 13 companies including Porsche China, SAIC Motor, and joint ventures of foreign companies. At the end of last month, Tesla became the first foreign-invested company to receive a compliance certification from Chinese authorities in the data security inspection, advancing the introduction of a fully autonomous driving system in China.