Made in China’ EVs are taking over the streets, but just how safe is your data?
Beijing: Under the bright lights and flashy displays at China’s annual auto show, electric vehicle companies are doing their best to attract customers and expand into overseas markets.
BYD, China’s EV golden boy, has tried to impress audiences with its five-minute “flash” charging technology, even setting up a frozen cage set at minus 30 degrees to demonstrate that its vehicles can charge in sub-zero climates.
Xpeng has developed its in-house “super brain” artificial intelligence chip that powers the autonomous driving functions of its vehicles. It is said that the same chip will allow prototype flying cars to be mass produced and take to the skies by 2027. Other companies have placed humanoid robots next to vehicles to help attract the attention of influencers livestreaming at the show.
Chinese EV brands are stuck in a price war death spiral on their home turf. With the exception of BYD and a few others, most brands fail to make a profit and face collapse when government subsidies and tax breaks run out. This has fueled a technology race to make its vehicles as “smart” as possible, seeking to gain an edge over rivals while steadily reducing profit margins.
‘We’ve reached a point where Chinese electric vehicles have a dominant position in the market, and so at some point you have to ask: Do our vehicles have critical infrastructure?’
Simeon Gilding, former director general of the federal intelligence agency, the Australian Signals Directorate
At the same time, the Iran war has given them the opportunity to boost exports, which are up 140 percent from March last year as motorists, including Australians, switch to electric vehicles to escape sky-high fuel prices triggered by the narrowing of the Strait of Hormuz.
But as more Chinese electric vehicles hit Australian roads, discussion of potential security risks from foreign companies collecting large amounts of personal data has largely been sidelined in the national debate.
Cars’ intelligent software systems produce comprehensive data on vehicle and battery health and diagnostics, GPS location and potential devices connected to the vehicle, says Simeon Gilding, former director general of the federal intelligence agency Australian Signals Directorate. He says this poses a risk of espionage and, in extreme cases, a risk of sabotage if it is accessible by authoritarian governments.
“We’ve gotten to the point where Chinese electric vehicles have a dominant position in the market, and so at some point you have to ask: Are our vehicles critical infrastructure? Are they collectively as important as power plants and do they need to be regulated?” he says.
In China’s highly saturated EV industries, companies are racing to install AI agents in their vehicles; It aims to turn “connected” cars into sentient machines that can operate with voice commands and perform tasks such as parking the vehicle, booking a hotel and ordering food.
BYD and Geely are already collaborating with Chinese AI juggernaut DeepSeek on their smart technology; Other companies are partnering with Chinese technology giants Huawei and Alibaba and developing their own artificial intelligence models.
“There is no longer a distinction between a technology company and an automobile company,” Nissan Motor China chief Stephen Ma told reporters on the sidelines of Friday’s show.
Moreover, China mass produces cars that are not only cheaper but also technologically superior to their Asian and European rivals. China is not only the world’s largest EV factory, it also controls the battery supply chain and is a major player in auto software development.
“China has the most advanced robotics and mechatronics. They have armies of engineers. As a result, from a technical standpoint, products coming out of China, especially electric vehicles, are more advanced and cheaper than anyone else’s,” says Mike Costello, a Melbourne-based auto analyst.
Spurred on by the fuel crisis, Australians are eager to jump on the EV bandwagon, with sales rising by at least 50 per cent in March, according to statistics collected by industry lobby groups.
Costello says BYD is the biggest beneficiary, predicting it is on track to deliver 30,000 cars to Australian shores by June, which could make it the second best-selling brand behind Toyota by the end of the year. That’s a surprising penetration rate, considering it only starts selling cars in Australia in 2022.
As the government pushes to secure greater fuel supplies, Energy Minister Chris Bowen has been keen to defend the rollout of EVs, saying EV use has helped save 15 million liters of oil a week.
Electric vehicles are also critical to the government’s climate targets; increased uptake is contributing to the first non-Covid reduction in Australia’s transport sector emissions this year.
To keep things in perspective, one in seven cars sold in Australia in March was electric; Although this was a record figure, it still fell short of last year’s global average of 20 percent. It is not yet clear whether this is an increase triggered by the fuel crisis or a new baseline.
“Most of the research shows that when someone switches to electric driving, they tend not to switch back. So if you can convert them once, you’ve probably locked them in,” Costello says.
“Obviously the brands that are most poised to benefit from this are the Chinese because they have the most products.”
Currently, 80 percent of electric vehicles sold in Australia are produced in China, but this figure includes Teslas produced at the company’s factory in Shanghai.
Gilding, the former boss of the signals directorate, led the agency’s review of Chinese telecommunications company Huawei, which led to the Turnbull government’s world-leading decision to block Australia from building its 5G network.
He is cautious not to exaggerate the parallels between the Huawei ban and Chinese electric vehicles, but says the same basic concern is present: Under China’s intelligence laws, the state could mandate access to private companies’ data and contacts.
“Governments from small and medium-sized powers like ours need to think carefully about whether the risk is great enough to justify taking that risk.” [regulatory] “It offends the Chinese and prevents consumers from accessing cheap, high-quality Chinese products such as electric vehicles.”
For now, the Australian government seems to have decided no. It did not follow the United States, which banned the use of Chinese software and hardware in smart vehicles on national security grounds.
While the Biden Administration was pursuing the ban, then-US Commerce Secretary Gina Raimondo likened connected cars to “smartphones on wheels” and raised the specter that “someone in Beijing” would disable millions of cars on the road at the same time.
The ban, along with a 100 percent tax on Chinese vehicles, blocked China’s access to the U.S. auto market, protecting the local industry from competition.
Intense competition between the United States and China, shaped by years of trade wars and export controls, has blurred the lines between economic measures and national security concerns, and policy networks have been swept under the guise of one another.
China, for its part, has tacitly acknowledged the security risk posed by connected vehicles and in 2021 banned Tesla from its military complexes over concerns that vehicle cameras could collect data.
In Australia, public debate about the risk was largely played out in the Senate Estimates hearings, which examined Home Affairs Minister Tony Burke’s decision to use a Chinese-made electric vehicle as his personal car.
Under questioning by Liberal Senator James Paterson last year, Home Affairs officials acknowledged that Burke had sought a briefing from Australian security agencies on the matter and was advised not to plug his work phone into the car as a mitigating measure.
Authorities also presented evidence that connected vehicles, regardless of origin, could potentially listen in on conversations, map movements and record images, but some vendors pose greater risks because of their relationships with foreign governments, including China.
As the bond between China’s electric vehicle and AI industries tightens, questions about data security and regulation are sure to increase. The Albanian government has already banned the use of DeepSeek on government-issued devices, citing an “unacceptable risk” to national security. It’s unclear if or when DeepSeek integrated EVs might hit Australian roads. BYD did not respond to a request for comment.
Burke’s office did not directly respond to questions about whether he wants assurances from Chinese EV companies about where and how they store their data, or whether the government is considering extending the public sector ban on DeepSeek to vehicles that use it.
In a statement, the Home Office confirmed that the ministry constantly evaluates policy settings and that smart cars transmit a wide range of data to manufacturers and third-party providers in real time.
It advised buyers to “carefully review the manufacturer’s privacy and data collection policies before deciding to purchase a connected vehicle” and noted that vehicle owners should “also disable vehicle data sharing where possible.”
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Lisa Visentin is the North Asia correspondent for The Sydney Morning Herald and The Age, based in Beijing. He was previously a federal political correspondent in Canberra.Connect with: X or email.
