All Tesla models have reportedly been banned from entering any Chinese military base or complexes over concerns they pose a security risk.
According to news agency Reuters, Tesla vehicles have been forbidden from entering any area operated by the military because of the cameras installed on its vehicles.
Any Tesla owners who work for the military, meanwhile, have been asked to park their vehicle off-site, following concerns that the car-maker is collecting sensitive data.
Reports also suggest that, in future, the Chinese government will restrict the use of Tesla vehicles by military personnel and anyone working for state-owned companies in sensitive industries over fears of possible security breaches.
As well as a range of exterior cameras for its semi-autonomous driving aids, the Tesla Model 3 and Tesla Model Y have also introduced a new camera on the rear-view mirror for its upcoming robotaxi feature that could potentially record the occupants within the car.
Tesla cars are also apparently under suspicion for their ability to broadcast location tags and record short videos that can be sent back to the car-maker and potentially intercepted.
The move to restrict the use of Tesla vehicles by military personnel or employees working for some state-owned organisations is particularly damaging.
Last year Tesla sold 147,445 cars in China – a number equivalent to 30 per cent of its total global sales. Back in 2019, the Tesla Model 3 was even the country's best-selling electric car.
The targeting of Tesla as a potential security risk is viewed by many analysts as retaliation by China for Washington's move to prevent Chinese telco Huawei from operating in the US.