SINGAPORE--China's government is restricting the use of Tesla Inc.'s vehicles by personnel at military, state-owned enterprises in sensitive industries and key agencies, citing concerns that the American electric-vehicle maker's cars could be a source of national security leaks, according to people familiar with the effort. The move follows a government security review of Tesla's vehicles, which Chinese officials said found that the cars' sensors could record visual images of surrounding locations, the people said. Also, the Chinese government said Tesla--through the vehicles--could obtain various data such as when, how and where the cars are being used, as well as personal information of the drivers and the contact list of mobile phones that are synced to the cars, the people said. The government is concerned that some data could be sent back to the U.S., the people said. The government has informed some of its agencies to ask their employees to stop driving Tesla cars to work, they said.

The fatal crash and vehicle fire of the Tesla Model X near Mountain View, California, last week involved two other cars. Tesla vehicles have a system called Autopilot that handles some driving tasks. The 38-year-old Tesla driver died at a nearby hospital shortly after the crash.

The first is that old vehicles may not sell for as much as expected given the increasing competition Tesla is facing in the electric vehicle space. Second, leases as a percentage of vehicles sold have fallen dramatically as it is not possible to lease a Model 3 sedan. While roughly 20 percent to 30 percent of Model S and Model Xs were leased, the Model 3 must be paid for in cash.

Tesla Inc. on Sunday said its global sales rose 69% in the first quarter, its best quarter of sales yet, putting the auto maker on a path to meet its goal of 50,000 deliveries in the first half of the year. The Silicon Valley electric-car maker said it delivered roughly 25,000 vehicles--about 13,450 Model S sedans and about 11,550 Model X sport-utility vehicles--in the quarter, compared with a total of 14,820 a year earlier.

Electric cars used to be a joke – the ugly, expensive option for wealthy tree-huggers. But thanks to companies like Tesla, they are now sleek, desirable and increasingly affordable.