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Tesla comes under growing China pressure after customer complaint

Stock Markets1 hour ago (Apr 21, 2021 12:35PM ET)

(C) Reuters. Tesla charging stations are pictured in a parking lot in Shanghai

SHANGHAI (Reuters) – Tesla (NASDAQ:TSLA) Inc came under increased pressure in China on Wednesday from regulators and state media after Monday’s protest by a disgruntled customer at the Shanghai auto show went viral and forced the electric car maker into a rare apology.

The singling-out of Tesla in China, which accounts for 30% of the U.S. firm’s global sales and where it makes cars at its own factory in Shanghai, comes amid ongoing U.S.-China tensions and as other foreign firms have encountered backlash.

On Monday, a disgruntled customer clambered on top of a Tesla at the auto show in protest over the company’s handling of her complaints about malfunctioning brakes, triggering a social media storm, with regulators and state media also weighing-in.

Late on Wednesday, China’s market regulator urged Tesla to ensure product quality in the country, while the official Xinhua news agency said that Tesla’s apology was “not sincere”.

Tesla declined to comment, but said in a statement it would share data on the brake incident with regulators.

In videos that went viral from Monday’s car show, a woman wearing a T-shirt emblazoned with the words “The brakes don’t work” shouted similar accusations while staff and security struggled to restore calm.

Tesla on Tuesday apologised to Chinese consumers for not addressing the complaint in a timely way, and said it would launch a review of its service operations in the world’s biggest auto market.

However, the Xinhua news agency said Tesla’s apology fell short.

“A big company should have the responsibility of being a big company, no company can do whatever it wants,” it said in a commentary on Wednesday night.

“If a company does not rectify when it has a problem, if it does not change a problematic senior executive … it will eventually make mistakes again,” it said.

On Monday, Grace Tao, a Tesla vice-president, told a local media outlet that “there is no possibility Tesla will compromise” and said the she suspected that there was someone putting the customer up to the protest. The interview prompted accusations of “arrogance” on Tesla’s part from state media.

Meanwhile, the Global Times, a tabloid run by the ruling Communist Party’s official People’s Daily, published a story on a deadly accident reportedly involving a Tesla that “surfaced online on Wednesday, raising more concerns over the quality control issues of the U.S. car maker.”

Last month, Tesla came under scrutiny in China when the military banned its cars from entering its complexes, citing security concerns over cameras in its vehicles, sources told Reuters. Earlier this month, Tesla said cameras in its cars are not activated outside of North America.

Chinese internet users last month began calling for boycotts of brands including H&M, Adidas (OTC:ADDYY), and Nike (NYSE:NKE) over past statements saying they do not use cotton from Xinjiang, where some researchers and foreign lawmakers say authorities use coercive labour to meet seasonal needs, which China denies.

Tesla comes under growing China pressure after customer complaint

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