Elon Musk, the US electric carmaker Tesla's chief executive, says his firm would be "shut down" if its vehicles were used for spying on China, BBC reports.
His comments came in response to reports that China's military had banned Tesla cars from its facilities.
The military had raised security concerns about the data collected by cameras installed in the cars.
China is Tesla's largest market after the US, accounting for about a quarter of the firm's global sales in 2020.
On Saturday, Mr Musk said if a business did engage in spying on a foreign government, "the negative effects for that company would be extremely bad".
"There's a very strong incentive for us to be very confidential with any information," Mr Musk told an influential Chinese business forum via video link. "If Tesla used cars to spy in China or anywhere, we will get shut down."
