Tesla Apologizes to Chinese Consumers; Promises Review of Operations

Video source: YouTube, WION

Facing withering criticism from state regulators and media in China about its response to a customer's complaint, Tesla Inc (Nasdaq: TSLA) apologized to consumers in the world's largest auto market on Monday and promised a review of its service operations.

The automaker had received a wealth of unwanted attention from a very unhappy customer’s now-viral protest at the Auto Shanghai expo last week.

A woman who was upset about how Tesla treated her complaints turned up at the auto show and climbed atop a Model 3 wearing a t-shirt with the words “The brakes don’t work” printed on it, according to The Wall Street Journal. 

The protestor claimed that faulty brakes on her family’s Model 3 sedan caused a crash that left her parents hospitalized earlier this year.

During an interview last week, Grace Tao, Tesla’s vice president for China, said the company had previously tried to resolve its dispute with the woman but that it “cannot meet unreasonable demands” and that the individual was a “professional” protestor who may have been acting on behalf of groups that wanted to stir up trouble for Tesla.

"We cherish every customer, so we are willing to make a public promise: If it is a problem with Tesla products, Tesla will … firmly shoulder responsibilities to the end," the company said in a post on social media platform Weibo. "At the same time, what we need to explain is: our position is to not compromise with unreasonable demands." 

State media were quick to criticize Tesla in a string of editorials, and the incident and Tesla's response also prompted a warning statement from the Central Political and Legal Affairs Commission, which 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. 

One state media article titled “Three lessons Tesla ought to learn” advised the auto maker to respect the country’s consumer market, according to a CNBC translation of the Chinese-language text.

“The arrogant and overbearing stance the company exhibited in front of the public is repugnant and unacceptable, which could inflict serious damage on its reputation and customer base in the Chinese market,” the state-backed Global Times said in an opinion piece published Wednesday. 

Once the incident went viral on Chinese social media networks, several other people claimed to have similar issues with brakes in their Teslas, according to CNBC.

After initially pushing back against the woman’s allegations Monday, Tesla struck a different tone in a statement on Weibo the following day saying, “We apologize for failing to resolve the problem of the car owner in time. We will try our best to learn the lessons of this experience.”

“Tesla appreciates the trust and tolerance given by our car-owners, netizens and media friends, and actively listens to the suggestions and critics,” it said. “In order to make up for the discomfort of the owner as much as possible and the negative impact on her car using experience and life, we are always willing to try our best to actively communicate with her and seek solutions with the most sincere attitude.” 

Tesla also vowed to create a unit that would focus on delivering customer satisfaction and that it will carry out “self-examination and self-correction” to “rectify” issues with customer service processes. The company also pledged to provide driving data of the protestor’s crash to authorities and promised to cooperate with any probes. 

On Wednesday, China’s market regulator, the State Administration for Market Regulation (SAMR), announced it would place high importance on the auto show incident and instructed local authorities to protect consumer interests, CNBC reported.

In recent months, negative press about Tesla in China – one of the EV maker’s biggest markets – has increased, CNBC noted.
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. In response, Tesla said cameras in its cars are not activated outside of North America.  

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Source: Equities News