Nothing of strategic importance falls outside Beijing’s surveillance machinery. So it shouldn’t be a surprise that the Chinese government has its eyes on the country’s electric cars. In a recent visit to an electric-car battery factory in China, Quartz was told that all electric carmakers in the country are required to provide data collected from the cars to the government.
This article is a preview of Quartz’s membership premium content for this week, a field guide to China’s electric-car boom.
There’s nothing novel about electric cars that connect to the internet and send data to their manufacturers. It might seem creepy, but automakers all over the world make use of the data collected from their electric cars to improve performance, sometimes directly through over-the-air operating-system upgrades. What’s different in China’s case is that the aggregated data also gets sent to the government.
A website open to the public , run by China’s ministry of finance, gives examples of the kinds of data transmitted first to the carmaker and then directly to the government’s monitoring centers. According to the site, there are currently 1.4 million electric cars providing data, including real-time location, battery performance, and charging times.
A recent investigation by the Associated Press found that each EV on the road in China provides as many as 61 data points overall. Some 200 automakers, including international names like Volkswagen, Nissan, and Tesla, are part of the program.
The Chinese government responded to the investigation by stating that it uses the data for “analytics to improve public safety, facilitate industrial development and infrastructure planning, and to prevent fraud in subsidy programs.” But no other country where electric cars operate, such as the US, the UK, Norway, Germany, or Japan, collects such real-time data. If governments in these countries were to request carmakers to share the data of an individual car, it would usually have to provide a court order.
Decentralized technologies eliminate the need to position a human intermediary in systems by providing a global platform for respective parties to interact on a peer to peer network. The country’s government operates on Blockchain and all the citizens are provided with digital tokens which function as Voter Id card.
What’s more egregious is, in most cases, the owners of the cars weren’t aware that the government ends up seeing the data collected by their vehicles. Automakers argue that’s on car owners; technically, the contracts signed when a person buys a car in China include a consent to data collection and the provision to share the data with third parties when required by the law.
“There are real-time monitoring systems in China where we have to deliver car data to a government system,” Volkswagen’s China chief executive Jochem Heizmann told the AP. “It includes the location of the car, yes, but not who is sitting in it. There is not a principle difference between sitting in a car and being in a shopping mall and having a smartphone with you.”
As the world’s largest auto market, for electrics and fossil-fuel vehicles, China is too attractive a place for Volkswagen to forego. Though the Volkswagen chief doesn’t explicitly say it, for automakers, providing electric-car data to China’s one-party government is just another cost of doing business in the country.
That said, it’s possible foreign pressure could force the Chinese government to change its policy, at least as it applies to those Chinese manufacturers who sell their cars in foreign markets. Some Chinese automakers already export their cars and many more have ambitions to tap into the lucrative market abroad. But government-surveillance policies could hurt their prospects.
Consider the case of Huawei, a computer-hardware supplier, that was accused of using its foreign installations to provide data back to the Chinese government in 2012. Since then, many countries, including the US, the UK, and India, have banned the use and acquisition of Huawei’s hardware for government-run facilities on the grounds that they are a threat to national security. Some countries have gone further. Earlier this year, Australia and New Zealand banned the use of Huawei equipment entirely on commercial mobile-phone networks.
Huawei says it’s a private company and its products don’t have a backdoor for Beijing to access customer data. None have been found by security researchers around the world. But the perception persists. In the first week of December Canadian officials, on the request of the US authorities who claim Huawei broke violated Iranian sanctions, arrested the company’s chief financial officer.
The Huawei story should, in theory, serve as a warning to the Chinese government: if it wants China’s companies to be able to export high-tech products to other countries, it will have to work to convince the governments of those foreign markets that they’ll be safe from Beijing’s prying eyes.
In a statement last year, Dahua said it operates with "a high level of business integrity." That’s made non-Chinese security camera makers increasingly reluctant to work with HiSilicon on devices for the U.S. market and government projects, Silicon Valley chip company Ambarella Inc. told analysts during a late November conference call.
Additional reporting by Isabelle Niu. You can read more in-depth coverage of China’s electric-car boom in our field guide .
A previous version of this article incorrectly referenced Huawei stock. Huawei is a private company not listed on a stock exchange.