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Tesla does U-turn as China criticism mounts after owner protest

Tesla robot
Elon Musk had said the Tesla AI Day event would feature "many cool updates", including a preview of Tesla's upcoming robot, the Tesla Bot. File photo: Reuters.

(ATF) Tesla changed its stance of ‘no compromise’ to a heartfelt apology within a day of receiving consumer criticism and government attention after a high-profile owner protested on Monday at the Auto Shanghai show.

“We extend our great apology for failing to solve in time the car owner’s problems. In order to fully make up for the discomfort of the car owner, as well as the adverse impact on the car owner’s user experience and life, we are willing to do the utmost to actively communicate with the car owner, seek solutions with the sincerest attitude, and firmly fulfill our commitment of being responsible to the end,” Tesla China said in a statement late Tuesday night on the Twitter-like Weibo platform.

Tesla China has set up a taskforce for this particular case and will strive to satisfy the car owner’s demands while complying with laws and regulations, they added.

This marks a U-turn after Tesla China said just about a day ago that it “will not compromise on unreasonable demands”.

On Monday, a disgruntled customer invaded the Tesla booth at the Auto Shanghai show by leaping onto a Tesla car on display and creating a stir on social media.

Videos that went viral on Monday showed the woman wearing a graphic T-shirt emblazoned with the words “Tesla’s brake fails” and shouting similar accusations while staff and security struggled to restore calm. 

The woman was taken into police custody for five days.

Local media reported that the woman, surnamed Zhang, was the owner of a vehicle that had been involved in a collision earlier this year. Prior to this, she had protested in front of a Tesla service centre in Zhengzhou, the capital of Henan province, and videos of her sitting on the top of a Model 3, holding a loudspeaker, went viral.

Grace Tao, Tesla China’s vice president of external affairs, was quoted by local media on Monday as saying that problems are part of a new product’s development process and that a survey by the company showed that “90% of customers are willing to buy another Tesla car”.

Tao also suggested that a conspiracy was behind the protest at the exhibition.

Xinhua News Agency ran a commentary on Tuesday criticising Tesla’s uncompromising stance and suggested that, if a car company could not guarantee a safe driving experience and even speculates about a consumer’s motivation, its brand image could be tarnished in the end.

“Who would leap onto a car to protest if they can smoothly claim their rights?” the commentary said.

‘Respect consumers’ 

A few hours later, the Commission for Political and Legal Affairs of the Communist Party of China Central Committee weighed in, posting a commentary on its WeChat account saying the pioneering automaker should respect Chinese consumers and comply with local laws and regulations. 

Making an effort to find the cause of problems and improve features is something any responsible business should do, and Tesla hasn’t done that, the Communist Party body that oversees China’s police, prosecutors and courts said.

Tesla’s account of the dispute is that Zhang refuses an inspection of her car from a third-party agency and has asked for a huge compensation settlement. 

But Zhang’s husband told a new media unit of Chongqing Daily that Zhang only asked for a refund for the car purchase and compensation of her parents’ hospitalisation expenses, which they consider a reasonable claim. 

Tesla had offered to help Zhang resell the car if she could repair it through an insurance company, but Zhang has declined the offer. She insisted that Tesla should be responsible for its own product defect and said it is “unconscionable” to resell a car with brake problems.

A local market watchdog in Zhengzhou told Red Star News that a key cause of disagreement was that Tesla has refused to share data recorded by in-car devices 30 minutes before the car accident. The market regulator is still waiting for a response from a higher-level government body about whether consumers have rights to obtain such data. 

The Tesla China VP was reportedly absent from a session at the Boao Forum for Asia, which she was expected to attend on Wednesday.

David Zhang, an analyst with North China University of Technology’s research centre for automobile industry innovation, told Asia Times Financial that various reports of Tesla Model 3 crashes suggest there might be issues with Tesla’s Autopilot or Full Self-Driving (FSD) driver assist systems, and that the China-made Model 3s might have been built with lax quality standards.

However, it is difficult to find proof of Tesla’s fault because only Tesla can access the data recorded by in-car devices and China’s laws do not mandate carmakers to share such data.

“I would suggest that the authorities pass legislation to require carmakers to host the data with the government or third-party organisations so that in case of a car accident, the data can be retrieved,” he said.

The unwanted publicity in China comes at an uncomfortable time for Tesla when the world’s biggest maker of electric vehicles is also facing a probe at home after a “driverless” Tesla car crash in the Texas town of Spring that killed two men on Saturday night.

The Chinese government policies have so far been accommodating to Tesla, allowing it to wholly own its factory and benefit from the same subsidies that domestic manufacturers such as Xpeng Motors and Nio get. The theory is that the introduction of Tesla can help build up supply chains in China and have the same downstream impact as Apple did in helping spawn the likes of Xiaomi and Huawei.

Tesla sells roughly 30% of its cars in China, made at its Shanghai Gigafactory. But the company has been accused of being unresponsive to consumer complaints.

In early February, it was forced into issuing a public apology to China’s State Grid after a video purportedly showed staff blaming an overload in the national electricity network for damage to a customer’s vehicle. The EV giant was later summoned by five Chinese regulators for a “talk” over reported technical and safety problems, including battery fires and abnormal acceleration.

Over the past month, Tesla has also had to defend the way it handles data in China and had its cars banned from military complexes because of concerns about sensitive information being collected by cameras built into the vehicles. 

After that order, chief executive Elon Musk strenuously denied the company would ever use a car’s technology for spying, while Tesla’s Beijing unit said cameras built into its EVs aren’t activated outside of North America.


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Iris Hong

Iris Hong is a senior reporter for the China desk, and has special interests in fintech, e-commerce, AI, and electric vehicles. She began her career in 2006 and worked for Interfax News Agency and for PayPal before joining Asia Financial in July 2020. You can reach out to Iris on Twitter at @Iris23360981


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