“On the one hand, you actually have very cheap, affordable, decent value electric vehicles coming from China, which we know are beneficial to decarbonising our transport sectors,” she says, “and from that point of view, it is actually a positive thing to have increased competition.
“On the other hand, there is a real risk for countries that have large automotive industries. If your decarbonisation policies lead to de-industrialisation and job losses, you’re eventually going to get backlash.
“If production is moved to China, you could get the equivalent of the China shock in the heart of Europe – which could have some very negative effects.
“You may get a populist wave of anti-climate activists, for example, if you experience widespread unemployment.”
New frontline of espionage
About 150 miles east of Beijing, the beach resort of Beidaihe sits perched on the coast of the Bohai Sea.
Known as the “summer capital”, with government departments having once moved there annually to escape the heat, today the district is where China’s communist elites like to take their holidays.
If you drive a Tesla, however, then you had better find another place to relax.
Last year, authorities in the district turned away Teslas for at least two months, starting from July 1, citing reasons related to “national affairs”.
And it is not the only example of restrictions being placed on the American company’s cars in China.
Teslas have also been barred in the past from driving through parts of Chengdu where Xi Jinping, the Chinese president, was due to visit.
The restrictions underscore fears that the modern car – a computer on wheels that utilises a battery of sensors, microphones, cameras and software programmes – risks becoming a new front in global espionage, much as smartphones have already.
And while car makers have traditionally focused on locking down individual cars, in recent years they have also been forced to consider a range of other vulnerabilities, as criminals and hackers have devised ever more ingenious ways to copy the radio signals of car keys or even seize control remotely.
In one well-known experiment, hackers remotely disabled a Jeep Cherokee’s transmission while a journalist was driving it down a US motorway. This led to the recall of 1.4 million vehicles.
More recently, exercises by cyber security experts in the UK have resulted in vehicles being remotely compromised, with control taken away from the driver by an attacker crouched behind a laptop keyboard.
Sources who spoke on condition of anonymity said these trials – which revealed “gaping holes” in security – were carried out at the request of sceptical car manufacturers who refused to believe such hacks were possible until they were demonstrated in front of them.
Yet the type of security threat likely to be posed by China will not necessarily come from external actors.
Modern cars are increasingly dependent on “over the air” software updates, which they receive through a mobile phone-style SIM card that is built into the vehicle.
If a malicious actor gained access to these update systems, through servers known as “the backend”, they could beam out software that allows them to spy on vehicles and their driver remotely.
The concern is that this is not only vulnerable to hackers, but also potentially the manufacturers themselves, with those in China subject to national security laws that force them to comply with government requests.
“If somebody is able to attack the backend then, potentially, that might also have implications on the safety of the vehicle… you would be able to update the software,” says Martin Emele, of the Automotive Information Sharing and Analysis Centre.
This is the case for all new cars, wherever they are made in China, Europe or the US. A SIM card allows the car to receive updates, new features and security patches, just like a smartphone. In a crash a car will phone the emergency services. To do this, it needs a microphone and a link to the outside world. Cameras inside make sure you are not nodding off at the wheel.
All of this can be used to spy on you if security is lax, says Ken Munro, a security expert and ethical hacker at Pen Test Partners, a company that tests for security holes.
“We did a bunch of work on aftermarket car alarms. And we discovered that in many of them, you could actually remotely enable the microphones and listen to people in the cars.”
He believes that shoddy code poses more of a risk than state hacking. But last week, academic Jim Saker warned The Telegraph that in a worst case scenario, the cars could be remotely paralysed, representing a security risk to Britons.
This risk is compounded by the fact that Chinese technology is proliferate in western supply chains.
Chinese technology company Huawei may have been kicked out of the UK’s 5G network, but in December, the company reportedly made sales of its smart car technology to Mercedes Benz, Audi, BMW, and Porsche, putting Huawei products in 15 million cars a year.
The car makers were approached for comment.
In mitigation, “the Chinese market is highly, highly competitive”, Bergbaum of AlixPartners says, offering some protection since a car maker which did not protect a buyers’ data would quickly find itself short on custom and have its market snapped up by a rival.
“Clearly it’s something that should be monitored by the government.”
And with cheap Chinese cars soon expected to flood the UK and European markets, the question may soon become a far more urgent one for policymakers.
Stealth war
Over in Westminster, meanwhile, the potential invasion of Chinese cars is only just flickering onto the radar.
Government insiders claim they are alive to potential security issues, after spooks reportedly discovered a Chinese-made “geolocating device” in a car used for official business.
According to the i newspaper, the SIM card – placed inside a sealed part that was imported – was capable of transmitting location data and was discovered during a sweep of vehicles. China dismissed the claims as “groundless and sheer rumour”.
However, Conservative MPs are lobbying for the threat to be taken more seriously.
Dame Priti Patel, the former Home Secretary, believes the Government should slow the transition to electric vehicles if an influx of Chinese cars threatens to decimate the domestic car industry and pose security risks.
Previously, the Government stepped in to prevent Chinese telecoms giant Huawei from supplying technology used in the UK’s 5G mobile network, amid American concerns about the company’s links with authorities in Beijing.
