Chinese Regulators Question Tesla Over Car Security Malfunction
Radha Patel
International Business News Writer
China, the world’s largest automotive market, recently questioned Tesla representatives over the quality and safety concerns of their vehicles. Consumers reported that there were technical problems with the vehicles. These malfunctions included issues with acceleration, risks of batteries catching on fire, and possible safety risks from the recent remote update system. In fact, there were three major recalls in the last few months leading up to the summoning of Tesla representatives.
The first recall in October was issued because of a malfunctioning suspension. The following month, there were 870 cars recalled for faulty roofs. Last month in the U.S., a total of 135,000 cars were recalled for a computer memory failure. Earlier this month, 130,000 U.S.-made Model – S and Model – X recalls were initiated. In addition, nearly 37,000 Model – S and Model – X cars were recalled due to faulty touch screens. Although the recall for those cars were not issued in China, it still affected the profitability of Tesla. These recalls posed a struggle for further sales in China, as the reports of quality issues continued to grow over the last few months. The US electric car giant and China have enjoyed a close relationship for a while, as Tesla is the leading manufacturer there, but the outcome of the recalls may define how close they remain for the future.
When representatives from Tesla were called over, they were expected to follow Chinese laws and regulations in order to “guarantee public security.” Tesla’s standards also included to “safeguard the rights and legitimate interests of consumers,” according to the State Administration of Market Regulation (SAMR), China’s top market regulator. Tesla agreed to the guidance offered and said they “deeply reflected on shortcomings,” in its operations. The popularity of Tesla products comes, after China’s goal to develop its market of new energy electric cars. But the country has had issues of its own, because of limitations of the State Grid power supply.
To mend the relationship between consumers, Tesla jumped on the potential for future sales and built a third manufacturing unit in Shanghai in 2019. The goal was to widely on China’s part, but at the same time, this means a large increase in profit for Tesla. In fact, the total revenue of Tesla in China alone reached 6.66 billion in 2020, which was a 123.6 percent increase from the previous year. Although Tesla has been highly successful in the past few years, it has nonetheless undergone scrutiny, such as accusations of being arrogant. Earlier this year a Model T erupted in flames, but the company responded claiming it was due to collision damage to a high-voltage battery. Considering the conflicts between them, the unfolding of the relationship between Tesla and China has yet to be seen.
Contact Radha at radha.patel3@student.shu.edu