Tesla Rival In China Defends Data Regulation Tightening By Chinese Authorities

Bhaswati Guha Majumder

Aug 27, 2021, 06:39 PM | Updated 06:46 PM IST

(Representative image)
(Representative image)
  • Brian Gu, president of Chinese EV manufacturer, Xpeng, is one of those companies competing against Elon Musk's Tesla in the EV market, said that new data regulations in China is not to stop innovation but to make sure that we handle data with care.
  • The president of a Chinese electric vehicle manufacturer said that it is on the "right side of the regulation," while the Chinese authorities tighten data privacy laws aimed at automakers. It is a Guangzhou-based electric vehicle manufacturer, known as Xiaopeng Motors or Xpeng, which is one of those companies competing against Elon Musk's Tesla in the EV market.

    As of 26 August, Xpeng reported total sales of 3.76 billion yuan ($582.5 million) in the second quarter, up 536.7 per cent year on year. This week, the company also began shipping its flagship P7 sedan to Norway, its first overseas market. Earlier this year, it launched another sedan, P5, which starts at a lower price than Tesla's Model 3.

    As competition in China's EV market heats up, Xpeng has increased its production capacity and model launches. Earlier, the company said that one of its primary units would also double its manufacturing capacity.

    However, automakers are gathering a growing amount of data to train algorithms for autonomous driving and other smart features in cars. But the Chinese regulators expressed concerns over the amount of data collected by businesses across industries.

    Brian Gu, president of Xpeng, told CNBC: "I think our industry actually is stated as an industry that will be supported by the government. They see this as critical infrastructure, as well as a critical component of growth for manufacturing, smart technology and also carbon neutral agenda, which the government is pushing very hard. So we [are] actually on the right side of the regulation."

    China passed the Personal Information Protection Law (PIPL), a fundamental data protection regulation that works with the Cybersecurity Law and Data Security Law. This month, China's online regulator also announced proposed rules for automakers on data security management, and Chinese automobile companies have been encouraged to reduce the disorderly gathering and usage of data.

    While China's regulatory moves have slashed the worth of internet companies by billions in recent months, the electric car industry has remained largely untouched, and share prices have recovered. However, the development of EVs is a national priority for China that has aided the industry's development through subsidies and other incentives.

    According to Brian, his company has a "very robust organizational ... focus on data security" and it has communicated with government agencies on the topic.

    Xpeng has been working on XPILOT, a limited self-driving function for its cars. To train, such systems necessitate a large amount of data. Brian said that the new data regulations on automobile manufacturers are designed "not to stop innovation" but "to make sure that we handle (data) with ... care".

    The Chinese carmaker went public in the United States in 2020. However, in July, it completed a so-called dual-primary listing in Hong Kong. Several US-listed Chinese companies have sought to sell shares in Hong Kong as a means of mitigating geopolitical risks, particularly as the American regulators tighten auditing requirements.

    SEC Chairman Gary Gensler told Bloomberg this week that Chinese companies listed in the United States need to better inform investors about regulatory and political risks. At this point, it is unclear what that might entail, but Brian stated that Xpeng is keeping an eye on the situation and said that "going forward, we definitely will make sure we beef up whatever disclosures necessary to satisfy the regulatory requirement in China as well as the United States".

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