Finance

Musk visits Beijing as Tesla’s China-made cars pass security rules

Published

1 year ago

April 29, 2024

Elon Musk, CEO of Tesla and owner of social media site X, formerly known as Twitter, attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition center in Paris, France, on June 16, 2023.

Gonzalo Fuentes | Reuters

BEIJING — Local Chinese authorities have removed restrictions on Tesla cars after the company’s China-made vehicles passed the country’s data security requirements, the automaker said Sunday.

The breakthrough came as Tesla CEO Elon Musk arrived in Beijing for an unexpected meeting with Chinese Premier Li Qiang, amid the first major auto show in the city in four years.

Although Tesla’s electric cars are some of the most popular vehicles in China, they have reportedly been banned from some government-related properties due to concerns about what data the U.S.-based automaker can collect.

Tesla’s press release did not specify which local authorities had removed restrictions on the cars. The Biden administration earlier this year announced a probe into whether imported cars from China pose national security risks due to their ability to potentially collect data about the U.S. and send it back to China.

Tesla’s vehicles were not the only ones that passed the data security rules.

In addition to Tesla’s Model 3 and Model Y, several new energy vehicles from BYD, Lotus, Nezha, Li Auto and Nio passed China’s data security requirements, the China Association of Automobile Manufacturers and the National Computer Network Emergency Response Technical Team/Coordination Center of China said Sunday.

XPeng: We're bringing more AI into our vehicles

The new data security requirements for “connected vehicles” were released in November and cover cars released in 2022 and 2023 which automakers voluntarily submit for inspection, the center said.

The rules test for whether the cars anonymize facial recognition data outside the vehicle, default to not collecting cockpit data, process that data inside the car and prominently notify users of personal information processing. Tesla was included in the first batch of automakers that met the data compliance requirements.

Tesla said in its press release that it localized data storage in 2021 at its Shanghai data center, and passed the ISO 27001 international standard for information security after a review by third-party auditors.

Musk’s visit to China on Sunday also raised expectations that Tesla’s driver-assist software Full Self Driving would soon be available in the country.

However, JL Warren Capital CEO and Head of Research Junheng Li said on X that the rollout of a “supervised” version of FSD in China is “extremely unlikely.”

She pointed to challenges for Tesla to support local operation of the software as a foreign entity in China. Li said there’s “no strategic value” for Beijing to support FSD’s domestic rollout when there are many high-quality local alternatives, such as Xpeng‘s driver-assist software.

Premier Li visited Xpeng and other companies at the Beijing auto show on Sunday, and called for innovation and demand to drive production, according to state media.

Tesla is not exhibiting at this year’s auto show, as has been the case since a protester stood on one of its cars during the auto show in Shanghai in 2021. The show alternates between Beijing and Shanghai on an annual basis, and wasn’t held in 2022 due to the Covid-19 pandemic.

Finance

Stocks making the biggest moves midday: WOOF, TSLA, CRCL, LULU

Published

7 hours ago

June 6, 2025

Business Finance News

Finance

Swiss government proposes tough new capital rules in major blow to UBS

Published

9 hours ago

June 6, 2025

Business Finance News

A sign in German that reads “part of the UBS group” in Basel on May 5, 2025.

Fabrice Coffrini | AFP | Getty Images

The Swiss government on Friday proposed strict new capital rules that would require banking giant UBS to hold an additional $26 billion in core capital, following its 2023 takeover of stricken rival Credit Suisse.

The measures would also mean that UBS will need to fully capitalize its foreign units and carry out fewer share buybacks.

“The rise in the going-concern requirement needs to be met with up to USD 26 billion of CET1 capital, to allow the AT1 bond holdings to be reduced by around USD 8 billion,” the government said in a Friday statement, referring to UBS’ holding of Additional Tier 1 (AT1) bonds.

The Swiss National Bank said it supported the measures from the government as they will “significantly strengthen” UBS’ resilience.

“As well as reducing the likelihood of a large systemically important bank such as UBS getting into financial distress, this measure also increases a bank’s room for manoeuvre to stabilise itself in a crisis through its own efforts. This makes it less likely that UBS has to be bailed out by the government in the event of a crisis,” SNB said in a Friday statement.

‘Too big to fail’

UBS has been battling the specter of tighter capital rules since acquiring the country’s second-largest bank at a cut-price following years of strategic errors, mismanagement and scandals at Credit Suisse.

The shock demise of the banking giant also brought Swiss financial regulator FINMA under fire for its perceived scarce supervision of the bank and the ultimate timing of its intervention.

Swiss regulators argue that UBS must have stronger capital requirements to safeguard the national economy and financial system, given the bank’s balance topped $1.7 trillion in 2023, roughly double the projected Swiss economic output of last year. UBS insists it is not “too big to fail” and that the additional capital requirements — set to drain its cash liquidity — will impact the bank’s competitiveness.

At the heart of the standoff are pressing concerns over UBS’ ability to buffer any prospective losses at its foreign units, where it has, until now, had the duty to back 60% of capital with capital at the parent bank.

Higher capital requirements can whittle down a bank’s balance sheet and credit supply by bolstering a lender’s funding costs and choking off their willingness to lend — as well as waning their appetite for risk. For shareholders, of note will be the potential impact on discretionary funds available for distribution, including dividends, share buybacks and bonus payments.

“While winding down Credit Suisse’s legacy businesses should free up capital and reduce costs for UBS, much of these gains could be absorbed by stricter regulatory demands,” Johann Scholtz, senior equity analyst at Morningstar, said in a note preceding the FINMA announcement.

“Such measures may place UBS’s capital requirements well above those faced by rivals in the United States, putting pressure on returns and reducing prospects for narrowing its long-term valuation gap. Even its long-standing premium rating relative to the European banking sector has recently evaporated.”