China’s BYD Arrival in South Korean Market Sparks Data Leak Concerns

A BYD Atto 3 electric sports utility vehicle gets charged while on display at a BYD dealership in Yokohama, Japan, on April 4, 2023. Eugene Hoshiko/AP Photo

South Korean industry observers have expressed concerns over potential data leaks to China following the recent entry of Chinese electric vehicle (EV) maker BYD in South Korea, according to local reports.

BYD officially entered South Korea’s market last month with its Atto 3 compact sport utility vehicle (SUV), priced at around 31 million won ($21,323). With government subsidies, the price could drop to as low as 20 million won ($13,760), Yonhap News Agency (YNA) reported.

Some local industry observers raised concerns about the possibility that China could gain access to data stored by the SUV model’s over-the-air software update feature—which allows users to download updates via a cellular network—and navigation functions.

Yom Heung-yeol, a professor emeritus of cybersecurity at Soonchunhyang University, said the Chinese EV maker should be required to provide a mechanism allowing users to opt out of data collection.

“BYD must disclose exactly what types of data are collected and how they are processed,” Yom told the news outlet on Feb. 11.

Lim Jong-in, a professor emeritus at Korea University, told YNA that South Korea’s government should assess the cybersecurity risks associated with BYD vehicles to prevent potential “backdoor access vulnerabilities” that could enable third parties to access users’ data.

BYD Korea has stated that it will not share South Korean users’ data with China and will not integrate the Chinese artificial intelligence (AI) software DeepSeek into its EV models, according to YNA.

Beijing’s counterespionage law requires all entities in China to legally hand over user data if the Chinese Communist Party authorities ask them to.

South Korean government agencies have recently restricted the use of DeepSeek on government devices after the National Intelligence Service (NIS) warned about the app’s handling of personal data.

The NIS stated that, unlike other generative AI services, chat records stored by DeepSeek “are transferable as it includes a function to collect keyboard input patterns that can identify individuals and communicate with Chinese companies’ servers.”

The security agency also alleged that DeepSeek gives advertisers access to user data and stores South Korean users’ data on servers in China.

DeepSeek has sparked data privacy concerns following the launch of its free, open-source AI model in January. The app is controlled by Hangzhou DeepSeek Artificial Intelligence and Beijing DeepSeek Artificial Intelligence, according to its privacy policy webpage.

Regulators from Taiwan and Australia have already banned the use of DeepSeek’s AI app on their government devices. The Italian data protection watchdog has also blocked access to the app, saying DeepSeek failed to provide information about its data collection.

White House press secretary Karoline Leavitt told reporters on Jan. 29 that the U.S. government is looking into the potential national security implications of the DeepSeek AI app.

Both BYD Korea and DeepSeek did not respond to a request for comment by publication time.

Reuters contributed to this report.