Can you imagine a town without a single Tesla (TSLA) – Get Tesla Inc. Report on the road. Given how prominent they’ve become since Elon Musk first founded the company in 2003, it may seem like something from the long-gone past.
But as first reported by Reuters, one district in northern China is making that a reality this summer.
The district of Beidaihe is banning all Tesla cars from entering its territory for the next two months. It is home to a beach resort in the norther Hebei province, which borders the Bohai Sea coast and is home to some 74 million people.
Why Is This District Banning Teslas?
The reason for the ban is not so much about maintaining a tranquil, car-free coast but the fact that Beidaihe hosts an annual ultra-secretive summit of top Chinese leadership.
The event is always mired in secrecy — particular from foreign observers. The exact dates are never announced and, each year, some coverage of it emerges only after the summit has already taken place.
“Ostensibly an annual break for [China’s top leaders] to switch off and relax on the long beaches of the fabled northern resort town, it has also become an occasion when the country’s most powerful could spend time glad-handing, logrolling and tittle-tattling each other, making it the most watched unofficial event in the nation’s political calendar,” journalist William Zheng wrote for the South China Post in 2020.
A Beidaihe Traffic Police Brigade told Reuters that the Tesla ban was instituted due to a matter of “national affairs.”
He did not provide additional information on why Tesla was targeted as opposed to any other foreign car while Tesla, which disbanded its PR team, could not be reached for comment.
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Tesla’s Rocky History In China
China has already banned Teslas from an entire territory once before. At the start of month, the city of Chengdu in the Sichuan province barred any Teslas from driving on certain roads. This ban coincided with Chinese President Xi Jinping’s visit to the city.
Overall, Tesla has had a rocky journey in the China market. On the one hand, it’s incredibly popular — it has a Shanghai factory that produces 2,100 electric vehicles a day and accounts for more than half of the 936,000 vehicles the company delivered worldwide in 2021.
“I really think China is the future,” Musk said at the factory opening in 2019. In return, the Chinese government facilitated it with a number of tax breaks, loans and permits.
As in the U.S. and many other countries around the world, a Tesla is a status symbol favored by many wealthy residents.
Musk’s proximity to Chinese authorities evoked criticism at home. Amazon (AMZN) – Get Amazon.com Inc. Report founder Jeff Bezos once said that Musk’s offer to buy Twitter (TWTR) – Get Twitter Inc. Report could give China “leverage.”
But given China’s authoritarian leadership, any foreign company is always at the whim of local authorities. Recently, it has been cracking down. In 2021, it banned the cars from parking at any military or government complexes over concern of how certain camera and sensor technology could be used to gather government information.
Musk has, at the time, said that the risk of being shut down and losing the China market was too great to consider engaging in any sort of spying.
“Whether it’s Chinese or U.S., the negative effects if a commercial company did engage in spying – the negative effects for that company would be extremely bad,” Musk said at the China Development Forum in Beijing in 2021.