The accidental activation of the autopilot in Model 3 and Model Y is possibly causing increased acceleration. Fortunately, this can be fixed with a software update.
Little over two weeks ago, Tesla made a recall of over 285,000 cars in China. This was largely due to driver safety issues specifically pertaining to the Model 3 and Model Y autopilot system. As per the country’s administration for Market Regulation, it was identified that in some models the autopilot or cruise-control system accidentally switched on when drivers shifted gears or if they touched the gear selector.
This led to unexpected and increased acceleration. As a result, Tesla was forced to recall 249,855 Model 3’s and 35,665 Model Y’s. While the Model 3 was assembled in Tesla’s Shanghai factory, the Model Y was imported.
Tesla Issues an Apology on Weibo
After the Tesla recall was initiated, the electric vehicle giant issued a statement on Weibo, (a popular social media platform in China), apologizing for the problems caused to Tesla owners. The company promised that it would strictly adhere to all national regulations and will keep striving towards improving its safety features.
Apart from the recall, there are several other major challenges Tesla faced in China over the past couple of months. There were red flags raised by five different regulatory agencies in China. All raised suspicions over build quality of the Model 3 (manufactured in Shanghai).
Moreover, Tesla also received plenty of negative press in April after an angry protestor climbed on top of a Tesla booth at the Auto Expo in Shanghai, shouting out accusations that the EV manufacturer was installing faulty brakes. This is quite an alarming situation as recently there was an industry-wide Tesla recall in Australia over malfunctioning Takata airbags in 2014 and 2016 Model S series.
These are likely factors that led to dismal sales of Tesla cars in April throughout China. There were only 11,671 cars sold in April, which is a massive decline from March where 35,478 cars were sold. Sure, Tesla did see an increase in sales in May (21,936) but it is still a far cry from March.
China is experiencing a massive surge in electric vehicle sales; it is up by 177% compared to 2020. This is incredible considering the fact that the sale of traditional passenger vehicles only increased by 1%. Moreover, local EV manufacturers like Xpeng and Nio are giving Tesla a pretty hard run for their money and are gaining ground. Tesla lost a 4% EV market share in April as a direct result.
What Can Tesla Drivers Expect?
As a result of the Tesla recall, Chinese owners won’t have to bring their cars to a service station to get an update. However, the software fix will still be considered a recall. According to the SAMR site, Tesla only considered making a recall to eliminate driver safety hazards after Chinese regulatory authorities performed an extensive defect investigation into Model 3 and Model Y.
There is little doubt that Tesla pioneered updating its software to cars over the internet. Plus, the company is also considered a luxury car brand in China. However, it is also true that Tesla has been combating a continuous erosion of its brand reputation in the country. There have been a lot of high-profile Tesla car collisions, price hikes, and complaints of declining quality from Chinese owners. Now to top it off, this Tesla recall will not make things easier for the renowned EV manufacturer.
The Future of Tesla in China
If the demand for Tesla cars increases, the company can still export cars manufactured in Shanghai throughout Europe and the rest of Asia. However, Tesla’s growth in China largely depends on its strive to stay in the good books of Chinese customers and the country’s regulatory authorities.
A popular equity research company, JL Warren Capital, which mainly emphasizes on Chinese and US companies, remarked on June 7 that Tesla is cognizant of the increasingly bad rapport it has been getting in China. They know it is a PR crisis. However, the EV manufacturer has reached out to several influencers in the social media stratosphere to try and recant negative reviews and critical posts. This includes notable car reviewers and experts on social media today.
JL Warren research analyst Miles Qianli Dong sent an email to CNBC remarking that the Model 3 and Model Y Tesla recall isn’t a major issue and will have minimal impact on the manufacturer’s sales in the future. He also explained that Tesla’s attempt to recant negative reviews and to continually improve safety features of all its vehicles is a solid attempt to make concessions with the Chinese government as well as its consumers in China.
Sure, the recent Tesla recall has put a minor dent into the brand’s reputation. However, it is worth mentioning that many car brands have recalls, but not all manufacturers have the ability to offer an over-the-internet software patch. Chinese owners won’t have to go to a service station, and this is an incredible advantage that future buyers must consider in comparison to other brands.