The big picture: Following a security review of Tesla vehicles, the Chinese government has decided to restrict their use by military and state personnel due to concerns that the cameras and sensors in the EVs could be used to collect sensitive data at military complexes and sent back to the US. Tesla CEO Elon Musk addressed the issue at the China Development Forum, noting that the EV maker would get shut down if its cars were used to spy in China or elsewhere.

China has restricted the use of Teslas for military personnel, government agencies, and employees of "state-owned enterprises in sensitive industries" after deeming the EVs a national security concern due to their built-in cameras and sensors that Tesla could use for spying.

The decision comes after a government security review, according to The Wall Street Journal, that reports Chinese officials raising concerns regarding Tesla vehicles' ability to record images with its built-in cameras, tracking the whereabouts of its cars, syncing of mobile phone contacts and personal information that could potentially be sent back to the US.

Suspicion has also been raised over Tesla's "Full Self Driving" or FSD, a beta feature that uses the onboard camera and sensor tech, as do the other driver-assist and security functions such as Autopilot, Sentry mode, Cabin Camera, and Passive Entry.

While not an outright ban on driving Teslas, the Chinese military has reportedly ordered personnel to leave their cars parked outside military complexes, housing compounds, and sensitive sites over security concerns.

The issue was addressed by Elon Musk at the China Development Forum, a hybrid event held over the weekend in Beijing that focused on US-China ties. "There’s a very strong incentive for us to be very confidential with any information," said Musk via video link, adding that Tesla "will get shut down" if its cars were used for spying in China or anywhere else.