Tesla Model 3 Popularity Results in Soaring China Sales, but Quality Complaints Result in a Meeting With Regulators

By Mariliana Fotopoulou Tuesday, February 9, 2021

Tesla, the world’s largest electric vehicle (EV) company, saw its business sales soar over 123% in China in 2020, thanks to the popularity of its Model 3. However, complaints from car owners have earned the company a call from the Chinese regulators.

Tesla Motors dealership.

Model 3 — Best-Selling EV in China

According to the filing from Monday, the EV business saw its China sales surge to $6.66 billion, representing just over a fifth of total sales of $31.54 billion. This compares to sales of $2.98 billion recorded in 2019, which then represented just 12% of the $24.58 billion.

The company’s Model 3 is the best-selling EV in 2020 in China, with sales of over 137,000 vehicles. This model holds the 10th spot for the month of December on a list of best-selling cars regardless of energy source.

Despite soaring China sales, the company’s largest market is still the United States (US), with sales surging 20% to $15.21 billion in 2020.

Still, the EV business faces numerous problems in China. Last week, the company was told to recall more than 36,000 of its Model S and Model X vehicles in China over touch-screen issues.

The same failure has made Tesla recall almost 135,000 Model S and Model X vehicles in the States, with the touchscreen failure potentially resulting in a loss of several safety-related features while driving.

“Tesla has decided to voluntarily recall certain Model S and Model X vehicles built before March 2018 that are equipped with an 8GB embedded MultiMediaCard (eMMC) in the media control unit because the eMMC may malfunction due to accumulated wear... If a malfunction occurs, you may experience a persistent blank center display that does not recover after restarting the touchscreen, loss of certain functionalities, and/or a vehicle alert to contact Service,” the EV company said.

Similarly, the California-based business held talks with Chinese regulators over a series of quality complaints, including acceleration irregularities, battery fire, software upgrade failures, and other general issues.

In a statement posted on social media platform Weibo, the EV company said:

“Tesla sincerely accepts the guidance of government departments, deeply reflects on the company's shortcomings in the business process, and comprehensively strengthens self-inspection. We will strictly abide by Chinese laws and regulations and always respect consumer rights. At present, the company is strengthening the internal working mechanism and process under the guidance of the competent government department, 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,” according to the translated version of the original post in Chinese.

In a major news announcement yesterday, Tesla said it bought $1.5 billion in Bitcoin and will start accepting cryptocurrency as a payment method.

Summary

Tesla saw its business sales more than double in 2020 in China while an increase in the number of quality complaints have resulted in meetings with Chinese regulators.

About the Author


Headshot for author Mariliana Fotopoulou

Mariliana has an MSC in consumer analytics and business strategy. She has a special interest in fast-moving industries and big data.

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