Elon Musk, founder of Space Exploration Technologies Corp.- SpaceX, joins President Donald J. Trump at a launch briefing in preparation for the launch of the SpaceX Falcon 9 rocket with the Crew Dragon vehicle Wednesday, May 27, 2020, at the Kennedy Space Center in Cape Canaveral, Fla. (Official White House Photo by Shealah Craighead)
Tesla investors have high hopes for the Chinese market, but with homegrown competitors, Tesla is likely to face ongoing resistance. The WSJ explains here that Tesla has been facing mounting criticism of quality issues in recent months. If Tesla’s aren’t high enough quality for the Chinese market, what does that say about their prospects in the developed world? Trefor Moss reports:
SHANGHAI— Tesla Inc., TSLA -1.35% hit by a widespread outcry over its handling of consumer complaints in China, has issued a public apology and pledged to set up a customer-satisfaction unit as the electric-car maker seeks to overcome its latest stumble in the fast-growing market.
A protest by an aggrieved Tesla customer at the Auto Shanghai expo on Monday sparked an online backlash against the U.S. car maker. The protester alleged that faulty brakes on her family’s Model 3 sedan had caused a crash that left her parents needing hospital treatment earlier this year. Last month, in response to earlier protests by the same person, Tesla issued a statement saying that the woman’s father had been speeding at the time of the crash, citing a police report.
“We apologize for failing to resolve the problem of the car owner in time,” Tesla said late Tuesday local time on its official account on China’s Twitter-like Weibo platform. “We will try our best to learn the lessons of this experience.”
Hours earlier, the Central Political and Legal Affairs Commission, a high-level Communist Party body that oversees the country’s legal apparatus, accused Tesla of arrogance and of endangering Chinese consumers by selling defective products.
“Tesla has to face up to the torment of its Chinese customers” and stop “pretending to be oblivious to hidden dangers of which it’s well aware,” the commission said in a post on social-media platform WeChat.
In its apology, Tesla pledged to establish a unit that would focus on delivering customer satisfaction. Tesla said it obeys decisions of government departments, respects consumers, and actively cooperates with all investigations.
Its statement didn’t directly address the allegations of faulty brakes or other quality shortcomings.
Tesla has faced mounting customer complaints in China over quality issues in recent months. Regulators in Beijing summoned Tesla for a rare public rebuke over its quality record in February, prompting the company to promise to make improvements. Last month, Chief Executive Elon Musk was forced to reassure Chinese officials and consumers that Tesla cars couldn’t be used to spy on China, following a government move to ban military personnel and staff from key state-owned companies from driving its cars in case the vehicles posed a security risk.
China is a fast-growing market that Mr. Musk has said will become the company’s largest. China hosts Tesla’s only operational plant outside the U.S.
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