Smart Cars

China's government is restricting the use of Tesla Inc.'s vehicles by military staff and employees of key state-owned companies, citing concerns that the data collected by the cars could be a source of national security leaks, according to people familiar with the effort.

Fears over how data is handled by tech manufacturers also underscore how the rising popularity of highly digitalized cars-loaded with cameras and sensors and with built-in connectivity that allows carmakers to amass data-is stoking concerns over privacy and even national security. They were told by their agencies that among the government's concerns is that Tesla vehicles can be constantly in record mode, using cameras and other sensors to log various details, including short videos.