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Tesla says sorry to Chinese buyers, back-pedalling on its ‘no compromise’ stance

Tesla said sorry and back-pedalled on its “no compromise” attitude towards what it called “unreasonable” customer grievance, as it succumbed to pressure on social media by some of its most important buyers and local authorities in the world’s largest market for electric vehicles.

The apology, issued late on April 20, came a day after a protest at the Shanghai Auto Show, where a woman wearing a T-shirt emblazoned with the words “brake malfunction” and a Tesla logo jumped on top of the carmaker’s vehicle. She was eventually dragged away by security guards.

“We are deeply sorry for the delay in resolving the owner’s issue,” Tesla said on its official account on the Weibo microblog site. “We always try our best to actively communicate with our [customers], look for solutions and we will fulfil our responsibility.”

The about-turn in Tesla’s public relations management underscores the importance of China’s market to the carmaker’s sales, and its stock price. Tesla delivered a record 184,800 vehicles worldwide in the first quarter, buoyed by rising demand in China, where the carmaker sold 68,982 vehicles, or 37.3% of global deliveries in the same period.

“Users’ complaints about the quality of its Chinese-made cars are sounding an alarm at Tesla,” said Eric Han, a senior manager with the business advisory firm Shanghai Suolei. “It is not enough to knock down Tesla’s sales, but it does damage its image.”

For now, Tesla remains the runaway winner in delivering premium electric vehicles in China, priced more than 300,000 yuan (RM190,220) in the mainland’s premium EV segment. Gigafactory 3 delivered 35,478 vehicles in March, more than double the 17,259 electric cars delivered by Tesla’s three New York-listed Chinese competitors NIO, Xpeng and Li Auto.

Tesla’s Gigafactory 3 plant at the Lingang Free Trade Zone in Shanghai on Friday, December 25, 2020. Photo: Bloomberg

Monday’s protest at the premier trade show of the world’s largest vehicle market was not Tesla’s first run-in against Chinese public opinion.

The carmaker was named last December by the online technology media PingWest, which cited unnamed former and current employees in describing its US$2bil (RM8.23bil) factory a “Giga-sweatshop”, along with claims that Tesla had used substandard components in its locally assembled Model 3 vehicles. Tesla denied the accusations and said it would sue PingWest.

Tesla’s executives were hauled before five ministry-level authorities in February, and grilled about the quality of its Shanghai-made Model 3s. The carmaker, which delivered 140,000 Model 3s last year, pledged to “make rectifications”, according to media reports. In the same month, Tesla apologised to China’s State Grid – the state-owned utility – for “misleading consumers” in a war of words over what damaged the inverters on a batch of Model 3 vehicles.

Monday’s protest stunt at the Shanghai Auto Show quickly snowballed, as video clips of the yelling woman on the roof of a Model 3 quickly went viral.

It did not take long for China’s state media to weigh in on Tesla, after the carmaker maintained on Monday that it would “not compromise” on “unreasonable” customer complaints.

“Who gave Tesla the courage to not compromise?” asked a headline on an article published on Tuesday morning by Xinhua News Agency, the Chinese government’s mouthpiece media.

Visitors check an electric vehicle (EV) displayed at the Tesla booth during a media day for the Auto Shanghai show in Shanghai on April 20, 2021. Photo: Reuters

Changanjian, the social media account operated by China’s top law enforcement agency, the Central Political and Legal Affairs Commission, beseeched Tesla to “respect Chinese consumers and comply with local laws and regulations”.

“Where is Tesla’s responsibility, if the pioneering carmaker cannot provide safe products and cannot provide solutions to users when issues emerge?” according to the blog.

Tesla Shanghai’s vice-president Tao Lin, who heads the carmaker’s communications and government affairs, was absent at an April 21 panel discussion about supply chains at the 2021 Boao Forum for Asia conference in Hainan, in which she was originally scheduled to speak.

In its response, Tesla said it “respects and firmly complies with decisions of the relevant government departments, respects consumers, abides by laws and regulations, and actively cooperates with all investigations by government authorities”, according to the carmaker’s statement. “Tesla, as always, is grateful for the trust and tolerance given by our consumers, netizens and media friends, and listens attentively to suggestions as well as criticisms.” – South China Morning Post

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