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A ‘mega ship’ will deliver 30,000 EVs from China. Just how safe is your data?
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- [00:04]
A
If you think that the roads look a little crowded, it could be thanks to the 5,000 new electric vehicles that are due to land this week from China. This is just the first part of a shipment expected from the Chinese car manufacturing behemoth BYD. The company is due to ship another 25,000 EVs here this year. Our desire for EVs has spiked massively and understandably thanks to skyrocketing fuel prices. But it also comes with some unanswered questions and potential complications. I'm Samantha Salinger Morris and you're listening to the Morning Edition from the Age and the Sydney Morning Herald. Today, North Asia correspondent Lisa Vicentin on China's dizzying technological advances in EVs, robo taxis, flying cars and AI, how safe they are and if they come with the risk of being spied on. It's June the first. Hi Lisa. Welcome back to the podcast. Thanks.
- [01:11]
B
It's great to be joining you from Beijing.
- [01:12]
A
Okay, well we're lucky you're there because you attended China's annual auto show in April. So tell us about some of the innovations that you saw on display play because as you've written, some of these EV companies are going to really quite great lengths to lure in customers. Right?
- [01:29]
B
Exactly right. And it's being driven by an oversaturation of Chinese EV companies. So there's more than 100 operating in China's market. And it spurred really a furious tech race between them to do whatever they can to kind of out compete their rivals. And that means just jamming their cars full as much tech as they possibly can. So you're really seeing some very sophisticated interfaces, a really smooth integration between your smartphone and your car. Byd, the market leader, is unveiling, constantly unveiling new technology to speed up the quickness with which it can charge its batteries. So one of the demonstrations that they had on display at this year's car show was its 5 minute flash charging technology. They'd set up frozen cages to show that they could put their cars inside these sort of essentially frozen boxes to show that they could charge their car in, you know, sub 30 degree temperatures. I mean, I don't know who's driving an EV in those temperatures, but the sales pitch is if you want to and you live in an ice covered area, this shouldn't stop you from buying an ev. Xpeng, another Chinese car brand, it's spruiking its, you know, sort of homegrown AI chip that's powering its autonomous, its vehicles, autonomous driving functions. It's got A flying car model that it says it's ready to take to the market by next year. There's really so much tech around these cars. And if you talk to experts, they will say that the Chinese car companies, as many of them as there are, and the market is certainly oversaturated. This tech race between them has really seen them out clips their Japanese rivals, their Korean rivals, their American rivals, and what you can find in a Chinese car in terms of their software systems is better than what you can find elsewhere.
- [03:32]
A
Very interesting. And I want to ask you about this price war death spiral that you say that a lot of Chinese EV brands are now locked in together. There's reports that the EV market is oversaturated in China with dirt cheap cars. So how, how has it gotten to this point and, and where will it end?
- [03:50]
B
So the short answer to that is state subsidies. A lot of these, the vast majority of these EV brands, and like I said, there's, there's more than 100, it's a ridiculously oversaturated market, are being kept alive, they're being kept on life support by very generous Chinese government. State subsidies offered, you know, through tax incentives, but also local government subsidies. And some of these are really winding down now. So the future of some of these brands, any of these brands is, is really in doubt. And so it's spurred this price war to, to get whatever kind of market share that they can, constantly undercutting each other in price. And so some of the cars in China are now really very, very cheap. And you know, my experience of just catching the equivalent of Uber here in Beijing is that you're getting into cars often. They're extremely new, they've just rolled off the production line and they've got beautiful leather seats and they're packed full of tech. They've got, you know, screens everywhere on the back of seats, you know, amazing dashboards. I got into one where I couldn't even work out what button to press to try and get into the car. It didn't seem to have a handle. And then it all just sort of unfolded in front of me and the roof kind of came off. And it was, it was like getting into this sort of futuristic vehicle. And that's kind of commonplace around here. But where it will end, it's unclear. But most experts seem to say that there is a huge consolidation coming. And the warning is that as these state subsidies wrap up, these companies, many of them are called like zombie companies, that they are just stumbling along fueled by, fueled by government funding. And when that dries up their future is at risk and that there is a big consolidation coming.
- [05:44]
A
Okay, well, let's get into how this is impacting us in Australia or not. I guess the question is, is this saturation that's happening in China, in the EV market, has it made its way to Australian shores?
- [05:55]
B
Well, I think you've seen a huge uptake in interest, at least in EVs. Off the back of the Iran war and the, and the petrol crisis, more and more EVs are making their way to. To Australian shores. And part of that is because, well, two factors, really. One is obviously this huge competition in China, but to. The domestic demand in China has really plummeted off a cliff. The Chinese economy is stagnating, and so there's less money swishing around here, and so fewer people are buying cars, which means that the exporters, in order to, you know, stay alive, are having to look further and further afield to find markets for their cars. And that means pushing heavily overseas. The Australian market, it's small comparatively, but it's very, very attractive because we don't have any barriers to entry like tariffs, you know, the same way that, you know, the United States does and Europe does, and we want, well, the government wants people to drive EVs. So I think that's why you're starting to see a lot more Chinese vehicles on the road. And it's why companies like BYD are really pushing ahead to entrench their market share in Australia.
- [07:07]
A
And so you've written that sales here really have shot up, I think at least 50% in March. So I guess, should we be concerned as more and more Chinese EVs land on our roads? Like, is there a potential security risk here? I mean, even espionage, the security debate
- [07:23]
B
is something that hasn't really happened in depth in Australia, but has certainly happened in the United States. And it's a bit difficult to know how much of it exists in the OR is influenced by the general fierce rivalry that is happening between China and the US at the moment, and how much of it is a genuine security concern. But certainly under the Biden administration, which, you know, there were already existing 100% tariffs, effectively locking Chinese cars out of the U.S. but they also put in place further measures to effectively ban Chinese software and Chinese hardware from being used in any vehicles to hit the roads in the US and that was based on a purely national security justification. You had very senior people, including the Commerce Secretary at the time, saying, raising the specter of, you know, could Beijing essentially, by the flick of A switch turn off cars on the roads in the US and that this was handing a great deal of data because these cars, because they're so connected, suck up a lot of data. Was this handing a great deal of data advantage to Beijing? This is not something that has played out in Australia. It seems, from what we can tell, that the Australian government has made a call that the advantages that Chinese tech and Chinese EV offers Australia in terms of meeting its climate goals is something that's more important at this stage. But behind the scenes, of course, we don't really know what kind of conversations have been had and how extensively they've been had about these security concerns. But I would note that we even recently a decision has been made to allow federal MPs to use Chinese vehicles as part of the government fleet. So that gives us an indication of where the Australian government sees things.
- [09:21]
A
After the break.
- [09:23]
B
Where some of these concerns really arise in the China space is that there are national security laws here in China that effectively allow the government to demand entry to these data sets and to systems if they want to.
- [09:44]
A
Okay, so is this surprising at all to you? Because you've mentioned the US has banned the use of Chinese software and hardware in EVs because of security concerns. And you've written that, you know, these Chinese EV companies, some are coupling up with tech giants like Huawei and the AI juggernaut Deepseek. So AI is embedded everywhere in these cars. So why has our government, and in particular Energy Minister Chris Bowen, championed this uptake of these EVs? Like, on that level, it sounds a bit strange.
- [10:13]
B
Yeah. And Huawei, right, we'll all remember, was effectively banned from having any involvement in Australia's 5G rollout. And deep Seq has been banned from government phones in Australia. So there's a little bit of a disjuncture or discordance there between these two policies. I do think there's probably a more sophisticated analysis to be done by, you know, people who have far more across the technological impacts of these things than me. I mean, simply because Huawei was banned from our 5G rollout, which is a critical technology, doesn't necessarily mean it poses the same kind of risk if it's, you know, used in the interface in cars. But you do have serious people. For example, I spoke with Simeon Gilding. He was a former Director General of one of our top spy agencies, the Australian Signals Directorate. And he was involved in, he really led, actually, the agency's advice that Huawei should not be allowed entry into this 5G market. He has raised concerns that governments need to answer this question about whether Chinese EVs should be considered critical infrastructure. You know, are they at the point where they can collect so much data and hoover up so much data that they should be classified as critical infrastructure in this way? Particularly as more and more Chinese cars hit the road and do we need to start thinking about whether they should be regulated? He doesn't have a definitive answer on that. He's not trying to shape policy in a particular direction. He's just posing that this is a question that governments should answer at some point. These cars, because they are so connected, they do really hoover up a lot of information, a lot of information on battery health along your destination. So they have cameras everywhere they can possibly record where you're going to and from and capture the surroundings of where you're going. Our Home Affairs Minister Tony Burke drives a Chinese EV and he has been advised by Australia's security agencies to not plug in his phone. So this gives you an indication that there are real concerns there for the average consumer, for the average driver, this may not be such an issue. I mean, we're handing over our data left, right and center, not just to Chinese companies, but to, you know, to meta, to, to all the US tech giants. Where some of these concerns really arise in the China space is that there are national security laws here in China that effectively allow the government to demand entry to these data sets and to systems if they want to. And so all of these concerns about data and how it's being stored and how it might be used center around those laws and the capacity that the Chinese government has to go in and grab it. Not that we know whether that's ever happened. Most of these tech companies, Chinese tech companies will always assert their independence and say that they store things safely, but that's where the concerns arise.
- [13:14]
A
Okay, it's so interesting and in particular what you said about the Home Affairs Minister Tony Burke being advised, you know, not to plug in his phone into his Chinese ev. So I guess the question is, you know, could we see Australia's stance on security around EVs change? Particularly given that the Albanese government has already banned the Chinese AI Juggernaut Deep Seq from government issued devices. Right.
- [13:37]
B
It's a good question and I think, you know, it's one that at this stage it looks like, no, they're not going to move in that direction. And there's also a point of diminishing returns, so to speak. I mean, Chinese cars are, you know, getting towards a saturation point where it's going to be very difficult to bring in regulation after the fact. Right. You know, BYD is on track to become, you know, the second or third biggest selling car brand in Australia this year, which is really an extraordinary achievement given that it was not even in the market five plus years ago. So if you wanted to move on this, you needed to move kind of yesterday rather than trying to band aid over it after the fact.
- [14:22]
A
Very interesting. And just to wrap up, Lisa, I really want to ask you what it's like there on the ground in Beijing when you've had this experience of being in these connected electric vehicles. I mean, you spoke about stepping into one which sort of sounded like it was like an origami machine machine or something. So I guess, what is it like when you're there living in such a highly connected society, knowing that technology may be watching your every move? And do you think Australians in Australia should be concerned at all?
- [14:51]
B
It is funny describing it as an origami. It really did kind of unfold in that way.
- [14:56]
A
It sounded like it. I mean, it sounded wild.
- [14:59]
B
The tech. The tech is really impressive. And, you know, one of the things near me, there's a taxi cab rank. All the taxis here are electric vehicles. And so there's a charging rank where they just plug in. I was walking through the hutongs in Beijing the other day. The hutongs are like the old Beijing. And you go there to see what Beijing sort of used to be like. And they're connected by these ancient alleyways. But, you know, embedded in that are BYD charging stations where people are charging, you know, their bikes and they're charging their EVs. And that's the other thing. Here there really are no motorbikes on the road like, you might say, see in other parts of Asia. You might see in Kuala Lumpur or the Philippines, the noise of the motorbikes. Everyone here is riding an E bike. So China is very, very much plugged into the electric vehicle revolution in terms of being watched for your every move. It's weird because you become accustomed to it. You become accustomed to handing over your ID and your passport whenever you catch a train here. Your passport is your ticket. There are security cameras on every corner. Facial recognition is used everywhere. It's so embedded in daily life that you really get used to it. And I think it's only when you. It's only when you need to cover something sensitive or when you have cause to suddenly be aware of the fact that you're being watched that it really hits home how much data is being collected on you, you know, every move that you make.
- [16:35]
A
Wow, that's startling that. That how you become so accustomed to it. But at the same time, when I give it a moment, I think, yep, that's. That's how we are.
- [16:42]
B
Yeah, exactly.
- [16:43]
A
Well, we're so lucky you are there on the ground reporting on this and everything else. So thank you so much, Lisa, for your time. No worries.
- [16:49]
B
Thanks for
- [16:54]
A
Foreign. Was produced by Josh Towers. Our executive producer is Tammy Mills. And our podcasts are overseen by Lisa Muxworthy and Tom McKendrick. If you like our show, follow the Morning Edition and leave a review for us on Apple or Spotify. Thanks for listening.