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While Tesla was goaded into this most recent recall, that the company took action at all can be seen as an attempt to mend relationships between it and China.
- It’s been a rough year for Tesla in China.
- From a viral video of an angry customer complaining about the company to stiff competition in the electric vehicle (EV) market, Tesla has faced several hurdles in China since launching there earlier this year.
- But a new problem for Tesla emerged this weekend: recalls.
What are these recalls about?
- China’s vehicle safety authority, the State Administration for Market Regulation (SAMR), announced that Tesla was having a voluntary recall.
- This recall would cover nearly 300,000 Teslas in China, which accounts for almost every Tesla sold in China this year.
- A flaw in Tesla’s software has made it so that drivers could mistakenly switch on an active cruise control feature in their vehicles.
- Think of it like this: imagine a driver is making a sharp turn when suddenly they start accelerating without touching anything.
- This could potentially lead to crashes, according to the SAMR.
What is Tesla doing about this malfunction?
- Fortunately, Tesla owners don’t even have to bring their car into a shop in order to fix this malfunction.
- Customers should be prepared to receive a software update on their vehicles over the internet in order to fix the malfunction.
- While this may be Tesla’s way of trying to fix a fragile relationship with the Chinese market, the SAMR pointed out that Tesla decided to conduct the recall only after regulators “initiated a defect investigation."
- This call-out by SAMR comes shortly after Chinese state media criticized the company for it’s “arrogance."
How is Tesla struggling in the Chinese market?
- After a woman complained about faulty brakes in her car, Tesla put out a statement dismissing her claims.
- In response, China’s state-backed publication Global Times responded by calling the company arrogant.
- “The arrogant and overbearing stance the company exhibited in front of the public is repugnant and unacceptable, which could inflict serious damage on its reputation and customer base in the Chinese market," the publication stated.
- In March, Tesla vehicles were banned from certain government facilities due to the numerous external cameras attached throughout the vehicle.
How is Tesla repairing its relationship with China?
- Not long after the barring of Teslas on government property, Elon Musk released a statement saying that if Tesla used cars to spy in China or anywhere, the company would be shut down.
- While Tesla was goaded into this most recent recall, that the company took action at all can be seen as an attempt to mend relationships between it and China.
- Miles Qianli Dong, a research analyst at JL Warren, told CNBC that “We believe that this is Tesla China’s subtle way to make concessions with Chinese consumers and government in light of the recent PR crisis."
- The company is also struggling in China due to stiff competition from other EV makers, but the recent recall offers Tesla’s customers something that other companies can’t provide, according to Taylor Ogan of Snow Bull Capital, a Boston-based hedge fund focused on new vehicle tech in China.
- “Most cars have recalls, but not all car companies can offer a software patch without making you go into the physical dealership," Ogan said. “Would-be buyers may see this as an advantage over competitors.”
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