Nio, Tesla’s Chinese Rival, Is Victim of Bitcoin Blackmail

Hackers stole electric-vehicle manufacturer Nio’s user and sales data.

Nio, one of Tesla’s  (TSLA) – Get Free Report most serious Chinese rivals, just took a blow. 

Competition among carmakers has intensified in recent months, prompting each to give maximum focus to their operations and objectives so as not to lose ground to rivals. 

This competition is worsened as demand has slowed. Many economists are increasingly anticipating a recession in major economies due to aggressive monetary policies aimed at combating inflation, which is currently at its highest in several decades. 

The continuous interest-rate rises in the U.S., for example, have prompted many companies to delay investments and to cut workers to adapt to the new economic environment. 

For auto groups, the economic slowdown has created a supply-demand imbalance as consumers face high interest rates on car loans.

Withal, supply chains remain disrupted, keeping production a challenge. 

It is in this context that Nio has disclosed that hackers stole user data and information about its sales. 

If the sales data were published, that could reveal Nio trade secrets to its competitors, while consumers would not be happy to learn that the company was unable to protect their information.

The company’s preliminary investigation showed that the stolen data appeared to be basic user information and vehicle-sales information before August 2021, Nio said. 

The firm added that on Dec. 11 it received an email in which the sender asked for $2.25 million in bitcoin to remain silent and not publish the stolen data.

Nio ‘Will Not Bow Down to Cybercrimes’

“The company strongly condemns such unlawful acts and will not bow down to cybercrimes,” Nio said.

Nio has told regulators about the incident. It also said that it would take responsibility for any potential damages to customers. It didn’t provide further details.

“We apologize for the impact this incident has had on our users and solemnly promise to take responsibility for any damages caused to our users as a result of this incident,” the statement said.

It added: “We will learn from the lessons and strengthen our technical strength to continuously improve the security protection of Nio’s information systems to fully protect the information security of our users.”

This is the second time this year that Nio faced a security incident linked to cryptocurrencies. In April the company said that one of its server managers used his position to mine ether, the second largest cryptocurrency after bitcoin, for more than a year.

A Previous Cyberattack in the Automotive Sector

Nio is also not the first automotive group to be hacked this year. 

The German automotive supplier Continental AG  (CTTAY) was the victim of a massive data theft in August. 

In total, 40 terabytes of data corresponding to 55 million documents were stolen. The data disseminated contained budgetary and investment plans, information on strategy, and data relating to Continental’s customers. 

In particular, Volkswagen  (VWAGY) – Get Free Report, Porsche  (POAHY) , Mercedes-Benz  (DMLRY)  and BMW  (BMWYY) could be affected. Information concerning Volkswagen’s software and on-board computers would be visible. The hackers would also have collected personal information about employees (name, address, remuneration, etc.).

“The investigation of the incident has since revealed that despite established security measures, the attackers were also able to steal some data from the affected IT systems,” Continental said in an update on Dec. 12. “Initial findings suggest that the attackers gained access to Continental’s systems using disguised malware run by an employee.”

The hacker group LockBit last month was selling online a large amount of stolen data for $50 million.

LockBit is a globally operated ransomware-as-a-service group that has been targeting state and local governments.

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