Tesla CEO Elon Musk speaks at a gap ceremony for Tesla China-made Mannequin Y program in Shanghai on Jan. 7.
Aly Tune | Reuters
GUANGZHOU, China — Tesla faces mounting stress in China as state media and regulators criticize the electrical automobile maker following a lady’s protest at a serious auto present this week.
Tesla could possibly be dealing with one in every of its worst public relations crises in China, a market buyers see as vital for its progress.
On Monday, a lady who claimed to be a Tesla buyer stood atop one of many firm’s automobiles on the Shanghai auto present with a T-shirt that learn “brakes do not work.” She was protesting an alleged brake failure in her automobile — a difficulty different Chinese language social media customers claiming to be Tesla drivers have complained about within the final a number of months. A video of the incident went viral on Chinese language social networks and was picked up by state media.
On Tuesday, Shanghai police recognized the protester by her surname Zhang and mentioned she was sentenced to 5 days detention for disturbing public order.
Tesla alleged the lady was concerned in a collision in February resulting from “rushing violations” and that of their two months of negotiations, she wouldn’t enable a third-party inspection however insisted on a refund for the automobile.
Criticism for being ‘conceited’
Tesla’s vp for China, Tao Lin, claimed in an interview Monday with Chinese language monetary information publication Caijing that the lady hoped for a excessive degree of compensation, and the corporate would not have any cause to present it to her.
In a submit on Twitter-like service Weibo, Tesla mentioned it will not compromise with “unreasonable calls for.”
State media and a authorities companies have been fast to reprimand Tesla. State-run information retailers printed a string of editorials, whereas the Chinese language authorities’s central disciplinary fee issued a warning assertion.
One state media article titled “Three classes Tesla must study” suggested the U.S.-based electrical auto maker to respect the Chinese language client market, in line with a CNBC translation of the Chinese language-language textual content.
“The conceited and overbearing stance the corporate exhibited in entrance of the general public is repugnant and unacceptable, which may inflict critical injury on its popularity and buyer base within the Chinese language market,” the state-backed tabloid International Instances mentioned in a separate opinion piece printed Wednesday.
Tesla apologized in a press release for not fixing the automobile proprietor’s issues in a well timed method.
In Weibo posts on Monday and Tuesday, Tesla mentioned it is prepared to cooperate with authorities. The corporate mentioned it should perform “self-examination and self-correction” to “rectify” issues with its customer support course of.
On Thursday, Tesla mentioned it handed over uncooked car knowledge to Zhang from half-hour earlier than the crash in query came about. The corporate has additionally been in communication with two market regulators.
Learn extra from the Shanghai auto present
“Letting the market chief in was very a lot in China’s curiosity, however letting the market chief dominate the market will not be in China’s curiosity,” mentioned Invoice Russo, founder and CEO of consulting and funding agency Automobility Restricted.
Russo famous that corporations together with Volkswagen and Daimler’s Mercedes unit have gone by comparable intervals of scrutiny previously.
Unfavorable press about Tesla in China has elevated in current months. Earlier this 12 months, a Tesla Model 3 reportedly exploded in a Shanghai parking garage, while a state media article said there were at least 10 reports in 2020 of Tesla drivers in the country losing control of their cars.
China has also reportedly restricted the use of Tesla cars among state and military personnel over concerns that the vehicle’s sensors could record images of their surrounding locations. Musk said his company would be shut down if its cars could be used to spy.
China’s market regulator, the State Administration for Market Regulation, met with Tesla’s local subsidiaries in February over increased consumer reports of vehicle problems. On Wednesday, the regulator issued a statement saying it places high importance on the Shanghai auto show incident. The authority said it has instructed local regulators to protect consumer interests.
Musk has looked to fend off the scrutiny. In March, he gave an interview to state broadcaster CCTV saying that the future of China is “going to be great” and that the country will be Tesla’s “biggest market.”
— Evelyn Cheng contributed from Beijing; CNBC’s Yin Hon contributed to this report.