Publishing Date: Oct 26, 2021

Datacentres for better security

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PRESS RELEASE: US-based electric vehicle maker Tesla announced the completion of its highly anticipated research and development (R&D) and innovation centre and its Gigafactory data centre in Shanghai, in a move that analysts say showed Tesla's positive attitude toward the Chinese market despite tensions between China and the US in a wide range of areas, including data security.

Following the completion of the two centres by Tesla in Shanghai, analysts said that it is a clear indication of the US company's confidence in China's strong innovation capacity, as well as showcasing the Chinese government's openness to global tech companies.

Speaking on the side lines of the completion of the new centres, Zhu Xiaotong, president of Tesla's greater China region, said that amid the global transition to sustainable energy, Tesla has been fulfilling its commitment to focusing on the Chinese market.

In the third quarter, Tesla's revenue in the Chinese market reached $3.11 billion, a year-on-year increase of 78.5 percent, according to documents submitted by Tesla to the US Securities and Exchange Commission. The Chinese market accounted for approximately 25 percent of Tesla's global revenue in the first three quarters this year, making it the second-largest market for Tesla after the US.

 “The two centres clearly showcase Tesla's determination to grow bigger in the Chinese market as well as its positive attitude to Chinese consumers,” Feng Shiming, an auto industry analyst..

While China-US ties are strained, the move by Tesla – an advanced American company – is a “leading and innovative action,” he said.

“It also demonstrates that the Chinese government is open to global tech companies, even if the US blames China on cybersecurity issues,” Feng noted.

Elon Musk said at the World Internet Conference on September 26 that all data generated by all Chinese businesses, including production, sales, service and charging data, will be stored in China, at the data centre.

While China is strengthening its regulations on data security, Musk said that all personally identifiable information on Tesla car owners is stored safely in China and will not be transferred overseas.

The data centre is expected to promote data sharing with consumers and data protection, but to what extent it will share the data with Chinese consumers is yet to be seen, Feng said.

In addition to the data centre, the completion of the R&D and innovation centre not only pushes Tesla into a new process of localisation in China, but also provides the industry with a paradigm for training local talent, further accelerating the prosperity of China's smart car R&D system, Zhu said.

The R&D centre has 28 laboratories, which focus on the development of Tesla's software, hardware, process and technology in China. The centre also undertakes application adaptation and standard testing for the Chinese market, and participates in global artificial intelligence machine learning-related R&D.

“The R&D and innovation centre will attract top researchers to China while cultivating more talent in China's new-energy vehicle industry”, Feng said.

“The R&D and innovation centre will carry out more original development work on complete vehicles, charging equipment and energy products, and develop into a comprehensive R&D centre on the same scale as the R&D centre in the US”, the company said.


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