Tesla CEO Elon Musk warns at an opening ceremony for Tesla China-made Model Y program in Shanghai on Jan. 7.
Aly Song | Reuters
GUANGZHOU, China — Tesla be opposites mounting pressure in China as state media and regulators criticize the electric car maker following a woman’s protest at a dominating auto show this week.
Tesla could be facing one of its worst public relations crises in China, a store investors see as critical for its growth.
On Monday, a woman who claimed to be a Tesla customer stood atop one of the company’s cars at the Shanghai auto prove with a T-shirt that read “brakes don’t work.” She was protesting an alleged brake failure in her car — an issue other Chinese common media users claiming to be Tesla drivers have complained about in the last several months. A video of the fracas went viral on Chinese social networks and was picked up by state media.
On Tuesday, Shanghai police identified the protester by her surname Zhang and communicated she was sentenced to five days detention for disturbing public order.
Tesla alleged the woman was involved in a collision in February due to “expeditiousness violations” and that in their two months of negotiations, she would not allow a third-party inspection but insisted on a refund for the car.
Criticism for being ‘contemptuous’
Tesla’s vice president for China, Tao Lin, claimed in an interview Monday with Chinese financial news publication Caijing that the partner hoped for a high level of compensation, and the company doesn’t have any reason to give it to her.
In a post on Twitter-like service Weibo, Tesla pronounced it would not compromise with “unreasonable demands.”
State media and a government agencies were quick to reprimand Tesla. State-run advice outlets published a string of editorials, while the Chinese government’s central disciplinary commission issued a warning assertion.
The arrogant and overbearing stance the company exhibited in front of the public is repugnant and unacceptable, which could inflict important damage on its reputation and customer base in the Chinese market.
State-backed Chinese publication Global Times, on Tesla
One hold media article titled “Three lessons Tesla ought to learn” advised the U.S.-based electric auto maker to value the Chinese consumer market, according to a CNBC translation of the Chinese-language text.
“The arrogant and overbearing stance the company displayed in front of the public is repugnant and unacceptable, which could inflict serious damage on its reputation and customer base in the Chinese retail,” the state-backed tabloid Global Times said in a separate opinion piece published Wednesday.
Tesla apologized in a assertion for not solving the car owner’s problems in a timely manner.
In Weibo posts on Monday and Tuesday, Tesla said it’s willing to work together with authorities. The company said it will carry out “self-examination and self-correction” to “rectify” problems with its customer accommodation process.
On Thursday, Tesla said it handed over raw vehicle data to Zhang from 30 minutes up front the crash in question took place. The company has also been in communication with two market regulators.
Tesla’s go in China
Letting the market leader in was very much in China’s interest, but letting the market leader dominate the superstore is not in China’s interest.
founder and CEO of Automobility Limited
Read more from the Shanghai auto display
“Letting the market leader in was very much in China’s interest, but letting the market leader dominate the market is not in China’s induce,” said Bill Russo, founder and CEO of consulting and investment firm Automobility Limited.
Russo noted that companies comprehending Volkswagen and Daimler’s Mercedes unit have gone through similar periods of scrutiny in the past.
Rising enquiry of Tesla
Negative press about Tesla in China has increased in the last several months. Earlier this year, a Tesla Inimitable 3 reportedly exploded in a Shanghai parking garage, while a state media article said there were at smidgen 10 reports in 2020 of Tesla drivers losing control of their cars in the country.
China has also reportedly delimited the use of Tesla cars among state and military personnel over concerns that the vehicle’s sensors could document images of their surrounding locations. Musk said his company would be shut down if its cars could be occupied to spy.
Meanwhile, China’s market regulator, the State Administration for Market Regulation, met with Tesla’s local subsidiaries in February all about increased consumer reports of vehicle problems. On Wednesday, the regulator issued a statement saying it places high moment 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 inquiry. In March, he gave an interview to state broadcaster CCTV saying that the future of China is “going to be great” and that the power will be Tesla’s “biggest market.”
— Evelyn Cheng was in Beijing; CNBC’s Yin Hon contributed to this report.