SHANGHAI – A Tesla show on the inaugural day of this year’s week-long Shanghai Auto Expo has stolen the limelight – for all the wrong reasons.
On Tuesday, a Tesla owner who claimed a brake malfunction caused her Model 3 to have a collision plunged the promotional event into chaos and the company’s response has accelerated the controversy.
The woman climbed on top of a brand-new sedan on display at Tesla’s center stage booth in Shanghai and unfurled a banner that read “Treasure life, don’t buy Tesla, brake won’t work” in front of a media scrum.
She claimed the Model 3 had a sudden burst of speed, even when she slammed on the brakes, and veered off the road and hit several other vehicles and objects before coming to a halt.
The fracas ended when security personnel rushed to the scene and bundled the protesting woman into a waiting police car. She will be detained for at least five days by Shanghai Police for causing a nuisance in a public venue.
Yet the commotion over the US electric carmaker has carried on over social and state media, as critics point to a rising number of accidents allegedly due to Tesla quality issues.
In its first statement on Tuesday, Tesla China defended the “meticulous quality assurance” of its electric vehicles (EVs), stressing the car owner from Henan province who disrupted the show was solely responsible for the collision in February because she exceeded the speed limit.
“While insisting the car’s ‘faulty brake’ was to blame, the owner refused steadfastly Tesla’s repeated proposals to invite a third-party automobile quality inspector to ascertain the real cause,” the statement said.
“Tesla promises full cooperation if a state-level government agency can launch a probe into the cause of the accident to ensure the peace of mind of all Tesla customers.”
Tao Lin, Tesla China’s vice president for external affairs, also hit back when interviewed by reporters including those from state mouthpiece Xinhua.
She said Tesla China would never bow down to spurious charges and that frontier technologies and new products would always face questions. She said Tesla “would never compromise” and even hinted that “someone else could be behind” the Henan car owner’s stunt. It wasn’t immediately clear if she was referring to Tesla’s emerging Chinese competitors.
Yet Tao’s unapologetic line has at least partially backfired. On Tuesday, Xinhua berated Tesla over its perceived “arrogance” and warned that Tesla could be heading for a fall if it continued to soft-pedal quality control issues.
It also urged market watchdogs and industry regulators who have so far remained quiet to step in to win back the trust of Chinese consumers.
Amid the rising state media furor, which may or may not reflect Beijing’s official view, Tesla China scrambled to issue a second statement on Tuesday evening expressing “deep regret” while acknowledging the grievances of the Henan car owner had not been fully addressed.
The company vowed to set up a special task force to communicate with unhappy clients and to solve issues in the same statement.
Opinions are clearly split over Tesla’s product quality and if the Henan car owner really has a case. Other media outlets have since joined Xinhua with unflattering coverage that has highlighted other accidents involving Tesla’s cars.
Huxiu.com, a popular Beijing-based tech website, argued in a report on Wednesday that the two Tesla models on sale in China – the Model 3 and Model Y – had both been involved in similar collisions in the United States. Investigations by transport and road safety authorities there exonerated Tesla despite drivers’ claims of problematic brakes and other alleged defects.
Findings by the US National Highway Traffic Safety Administration’s Office of Defect Investigation revealed that related Tesla accidents reported to the watchdog as of December 2019 were all caused by drivers mistaking the accelerator for the brake, leading to crashes.
The office noted in its report that there was no proof that Tesla cars’ accelerator, drive-by-wire system or brakes were substandard, nor had any design flaws. It added that there was enough safety redundancy to bring the car to a complete stop in extreme situations, including when both the accelerator and brake were applied.
However, online news portal NetEast suspected Tesla had overlooked some teething problems in equipment and inspection procedures or even sought to cut corners in sourcing to save costs in its China-based production. The report noted it took less than a year for Tesla to build its sprawling assembly plant from scratch in Shanghai.
Previous reports in Chinese media noted that Tesla drives a hard bargain when sourcing parts from local suppliers, including demands for deep price discounts. Tesla has been ramping up bids to order more parts from Chinese suppliers to cut costs, a drive encouraged by Chinese officials to spur business for local companies when they green-lighted Tesla’s full ownership plan for its Shanghai project in 2019.
Tesla sold 147,445 cars in China last year, accounting for 30% of its worldwide deliveries. In March this year, 35,478 Model 3s and Model Ys were sold in the country, marking the best month for the company after the commissioning of its Shanghai plant.
Yet despite its still-strong cult following in China, Tesla has lurched from one crisis to another – and not all apparently of the company’s own making.
Last month, the People’s Liberation Army ordered a sweeping entry ban on Tesla cars from its military compounds and barracks on concerns that its high-precision and high-definition cameras fitted may feed footage containing sensitive information to servers and data centers outside of China, meaning the United States.
The Chinese military has not responded to media inquiries regarding the announced ban.
Tesla founder Elon Musk, at a virtual summit convened by the Chinese State Council’s Development Research Center last month, dismissed the claims as absurd as any data collected in China would be stored in the country.
Musk added that his company would have already been dissolved if China or any other country found Tesla was involved in espionage.