Most Tesla cars “recall” in China due to a safety error

Tesla detonated a “bump in the road” like a bomb directed at its factory in China with the largest recall of 285,000 cars in the largest recall of cars built at the Shanghai Gigafactory .

Tesla Inc. handles A safety issue in more than 285,000 passenger cars in China – including more than 90% of the locally made vehicles the company sells – is linked to the cruise control system, the country’s market regulator said, with some describing Tesla’s poor performance in China as increasing. badly.

All vehicles made and sold by China’s Elon Musk-owned electric car maker since the Gigafactory opened in Shanghai have been recalled over concerns about the cruise control system .

The problem, according to Chinese regulators, is that the system can be accidentally activated on certain models, resulting in unintended acceleration. The recall includes 35,665 imported Model 3 vehicles and 249,855 Model 3 and Model Y vehicles made at the Shanghai plant, or nearly every home-made vehicle Tesla has sold in China since January 2020.

According to Bloomberg , the recall includes “nearly all” Tesla cars sold in China. The manufacturer did not publish sales data, but figures from the China Passenger Car Association indicate that the numbers published in the media are almost accurate.

The regulator and the Chinese company said on Saturday that the fix, which the State Administration for Market Regulation described as a recall, requires affected Tesla customers to upgrade the remote cruise control software and does not require going to the dealer, while the recall of the US company’s cars came after an investigation into potential defects, which found The cruise control system could be activated by mistake and is likely to result in an unexpected acceleration, the regulator said.

Tesla recalls its cars in China, effects and dimensions

The recall includes 249855 Model 3 sedans and Model Y compact crossovers manufactured by Tesla’s Shanghai plant, as well as 35,665 imported Model 3s. The market regulator also said it received a request from Tesla a few days ago for a refund, affecting vehicles produced between December 2019 and June 2021.

This setback is not as harmful as a traditional recall, as it can be resolved with a software update that does not require customers to return their cars, according to Tu Lu, founder of Beijing-based consultancy Sino Auto Insights, who said, “It’s just a patch.” “Most [customers] probably won’t know anything has happened to their car.”

However, the scale of the problem is a “black eye” for Tesla , according to Daniel Ives, managing director of equity research at Wedbush Securities, who noted that the announcement comes after a series of controversies for the automaker.

According to CNN, the company was recently the target of a protest at the country’s largest auto show in Shanghai by Tesla owners, who complained of problems with their cars. Regulators have also questioned the quality of Tesla’s Shanghai Model 3s made in Shanghai, and there have been reports of heavy scrutiny of the company by the Chinese military.

“Let’s be clear: This is not the news the bulls want to see because it adds to negative PR issues in China,” Ives wrote in a note to clients on Sunday. Musk predicted that the world’s largest auto market would eventually become the most important market for Tesla’s cars.https://youtu.be/KYk9-DOIROc

The affected vehicles were built between January 12, 2019 and June 7, 2021 at Tesla’s plants in Fremont and Shanghai. In most cases, the error is believed to be fixable via an over-the-air (OTA) update.

The need for a ‘smoother road’

China isn’t Tesla’s only concern. The company’s stock is down about 25% from its peak last year as it struggles with short sellers and concerns about its management seat.
But the series of disasters in China rebounded on Tesla during the Shanghai Auto Show in April, and protesters surrounded the company’s showroom for a brief period, as a woman climbed on top of a Tesla car to claim that her car had defective brakes. Initially, after facing criticism, Tesla later apologized to “car owners”, vowing to “conduct rigorous self-examination and self-correction, emphasizing to cooperate with relevant government department investigations.”

And that firestorm seemed to affect the company’s sales, albeit for a short time. The leader in electric vehicles sold fewer than 26,000 vehicles in China in April, down 27% from March sales, according to figures from the China Passenger Car Association (CPCA).
On the other hand, Tesla said, “The cumulative effects of negative publicity affected them,” noting that Tesla’s troubles “undoubtedly” gave its competitors an opportunity. In contrast, Chinese electric vehicle makers such as Nio, (NIO) Xpeng (XPEV) and Li Auto (LI) had an improvement in domestic sales during that period, but last month, Tesla sales returned to more than 33,000 units, according to the CPCA.

Ives said he believes the recall is “an obstacle in the way and does not deviate from the bullish thesis in the near or long term for Tesla China.” “However, going forward, they must have taken a smoother path to autopilot safety, or else the PR black cloud will continue,” he added.

The Chinese government’s concerns about Tesla

On the government front, Tesla has tried to placate officials in China by addressing the criticism. Last month, it announced that it had set up a new data center in mainland China to hold any data it collects from cars sold locally within the country’s borders — a move that came as the company faced questions about whether its cars could be used for spying. . Even Musk stepped in, reassuring officials of the “future of the company in China.”
But some analysts are calling for the company to do more. In his note on Sunday, Ives said the responsibility rests with the CEO and his team to ensure “these issues are in the rearview mirror.”
Le also said the automaker should focus on building more goodwill in the country by doubling down on customer service and improving relationships with authorities.
“If I get hired by Tesla … the first thing I’ll do is I’ll say, ‘[Let’s] try to snatch someone from Volkswagen or GM with the longest tenure in China from the government relations team,'” he said.