Headed by the world’s richest person Elon Musk, Tesla Inc. has come under the skeptical purview of the Chinese authorities as the entity has been warned concerning the customers’ quality and safety complaints in the country. The globally-acclaimed electric vehicle and clean energy firm from America, Tesla is one of the few foreign companies that have been allowed to set up their operations in China. The warning can be seen as a potential hindrance in the path of Tesla, which is the first automotive firm to operate a wholly-owned plant in the country.
According to the report, China’s top-tier market regulating authority, the State Administration for Market Regulation, and four other regulators had warned Tesla about the safety complaints. The regulatory authorities have ordered Tesla to follow the rules and regulations of China and lay special emphasis on enhancing the internal operability functions. The electric vehicle maker has been asked to ensure the supply of good quality products and is safe for customers.
The Chinese market space has been a rewarding sphere for Tesla products. Last year, the company made a global record by delivering nearly 500,000 vehicles to China, making it a hot spot for Tesla. The firm stated that the rapid increase in the Model Y production in the Shanghai plant would balance the lower production volumes of Model S sedan and Model X sport-utility vehicles in the United States. The company is working on releasing the updated versions of Model S and X.
The sudden warning of Tesla authorities comes when the firm is facing stiff competition from the local entities like NIO Inc., Li Auto Inc., XPeng Inc., etc. These native rivals are fast gearing to launch new models for the customers. Tesla entered the Chinese market even after the aggravating U.S-China trade war during 2018 and received the necessary support from the state-owned banks of the country. In 2019, Tesla started production of its Model 3 sedan and Model Y in the Shanghai plant. The ongoing scrutiny did not affect Tesla’s sales in China as it sold 15,484 indigenous Model 3 sedans and Model Y in January 2021 period earning valuable profits for the entity.