33 Asian Legal Business | October 2024 Globally, data issues are becoming a top concern across industries. As noted by King & Wood Mallesons, “To date, over 130 of the world’s 194 countries have passed laws on data and personal privacy protection. In most business activities, data processing and personal information collection are unavoidable, and the automotive industry is no exception.” According to Yang, EV companies face even stricter requirements in the areas of data compliance and privacy protection. “Vehicle data involves sensitive information such as user privacy, driving habits, and vehicle safety. Companies must ensure that every stage of data collection, storage, processing, and transmission complies with domestic and international laws and industry standards to protect the security, privacy, and integrity of the data,” she explains. Moreover, companies must “strictly adhere to cross-border data transfer regulations in relevant countries and regions.” In a recent article co-authored by KWM and carmaker Geely’s Digital Technology subsidiary, KWM classifies the data obligations of EV companies into three categories. The first category is “general obligations for personal information protection,” which follows international norms such as obtaining personal consent for data collection, implementing sufficient security measures, adhering to principles of minimal necessity and purpose limitation, and providing avenues for data subjects to exercise their legal rights. The second category is the “specific obligations for in-car personal data transmission.” This pertains to intelligent features such as fatigue prevention and AI voice assistants, which often require collecting facial features, eye-tracking data, voiceprints, and conversations. “For vehicles exported from China, if their in-car platforms or smart cockpit servers are based in China, companies must address the issue of transmitting in-car personal data across borders and comply with local data transfer laws,” KWM notes. The third category involves constraints related to mapping and national security, which are critical to autonomous driving features. In the U.S., for example, President Biden issued an executive order earlier this year aimed at preventing sensitive personal data and government-related data from falling into the hands of “countries of concern.” This includes certain types of personal identifiers, geolocation data, sensor data, biometric information, and financial data, which “must be stored locally and cannot be transferred to China.” As a result, “data localization” may become an increasingly common strategy for Chinese automakers. In late August, XPeng told Bloomberg that, as part of its plans to build a factory in Europe, it is also “planning to establish a large data centre in Europe.” Similarly, BYD announced last year that it would establish “BYD Overseas Cloud Service Data Centres” in multiple locations worldwide to “process and analyze user data and focus on providing powerful computing capabilities for BYD’s autonomous driving technologies.” Other compliance pain points Beyond data, Chinese EV companies going global face numerous complex and multifaceted challenges. According to Yang, some of the most important concerns include intellectual property (IP) protection, antitrust compliance, and environmental, social, and governance (ESG) compliance. “IP is one of the key challenges for EV companies in their international ventures,” Yang notes. “To safeguard their innovations and commercial interests on the global stage, EV companies must strengthen their IP awareness and integrate into international IP frameworks. This includes using mechanisms like the Patent Cooperation Treaty (PCT) to build a robust overseas patent portfolio and preemptively identifying risks through cross-licensing, patent pools, and other cooperative models.” Additionally, Yang stresses the importance of protecting a company’s trade secrets and avoiding infringement on those of its partners, which is crucial in preventing international litigation. As EV companies engage in overseas mergers, Compliance “Beyond direct vehicle exports, Chinese EV companies are diversifying their overseas strategies, the expansion of NEV projects overseas has been rapid. Chinese EV companies going global face numerous complex and multifaceted challenges. Some of the most important concerns include intellectual property protection, antitrust compliance, and environmental, social, and governance compliance.” — Yang Xiaoli, Tian Yuan Law Firm “整车直接出口之外，中国新能源车的出海模式正变 得更加丰富，各类新能源车出海项目迅猛发展。出海的 新能源车企面临多维度、复杂多变的挑战，最为重要的 包括知识产权保护、反垄断合规、ESG合规。” — 杨晓莉，天元律师事务所
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