Tesla operations in China stalled by regulators

Lucy Harley-McKeown
·2-min read
Tesla factory in Shanghai, China. Photo: Aly Song/Reuters
Tesla factory in Shanghai, China. Photo: Aly Song/Reuters

Regulators in China have temporarily thrown a spanner in the works for Tesla (TSLA) operations, as they have questioned quality and safety issues in its Shanghai factory.

Five regulators, including the country’s top market regulator, cyberspace watchdog and transportation authority, summoned the electric carmaker following complaints about abnormal acceleration and battery fires, according to a statement released on Monday.

The company said it would look to strengthen self-scrutiny and its internal management.

In response, Tesla posted a statement on Chinese microblogging platform Webo on Monday, saying: “At present, the company is strengthening internal working mechanisms and processes under the guidance of the competent government departments, and strengthening internal management in all aspects.

“For the problems reported by consumers, we will systematically investigate, effectively implement the protection of consumer rights and interests, further implement the main responsibility of corporate quality and safety, effectively maintain social public safety, and better contribute to the healthy and healthy development of China's new energy vehicle market in the future.”

China is Tesla’s second largest market after the US, having racked up sales of 120,000 units there in 2020. It contributes around 20% of is total revenues.

The factory in Shanghai, where Tesla has been granted tax breaks by the municipal government, has allowed the company to localise production and drive down its own costs in one of its most important markets.

China is the world’s largest car market and its government has been a driving force in the uptake of electric vehicles.

The carmaker has faced quality concerns elsewhere, with large numbers of the Model S and Model X cars in the US being recalled due to failing touchscreens.

READ MORE: Bitcoin hits new record as Tesla invests $1.5bn

Elon Musk’s company has already hit the headlines this week, as it moved to invest in $1.5bn (£1.1bn) Bitcoin (BTC-USD).

In a filing with the SEC on Monday, Tesla said it “invested an aggregate $1.5bn in bitcoin,” and “may acquire and hold digital assets from time to time or long-term.”

It said it may accept the currency as payment in the near future.

The investment comes as the cryptocurrency reaches new heights. The price topped $44,000 late on Monday following the news and rose to a new peak of more than $47,000 on Tuesday morning in London.

WATCH: Tesla invests $1.5bn in Bitcoin, will take as a payment