Tesla recalls more than 80,000 cars in China due to software problems, seat belts

Tesla is recalling more than 80,000 cars in China. Investors will be watching to see if the US giant has suffered reputational damage.

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Tesla is recalling more than 80,000 cars in China over software and seat belt problems, China’s market regulator said on Friday.

The American electric car giant is recalling a total of 67,698 imported Model S and Model X vehicles manufactured between September 25, 2013 and November 21, 2020, China’s State Market Administration. Quoc said.

The recall of these models is due to a software issue affecting the car’s battery management system. Tesla will offer free software upgrades on these vehicles.

Elon Musk’s automaker is also recalling 2,736 imported Model 3 vehicles manufactured between January 12, 2019 and November 22, 2019 as well as 10,127 Chinese-made version vehicles manufactured by the company. seat belt is likely to be faulty.

The regulator said Tesla will test seat belts on affected cars.

Tesla was not immediately available for comment when contacted by CNBC.

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Investors will be watching for any consequences for Tesla in China from the recall. The market is increasingly competitive with domestic challengers from backed Warren Buffett BYD to newcomers like Nio and Xpeng.

Bill Russo, CEO of Shanghai-based Automobility, told CNBC: “Recalls are always expensive and often amplified in a way that can be damaging in terms of reputation – especially true when the market is up. becoming super competitive and Tesla’s backlog is shrinking.”

“This recall mainly affects imported models (S and X), so it’s manageable if they ship first.”

China is one of Tesla’s most important markets. The company has a main production plant in Shanghai and has sold one record number of cars produced in China in recent months.

But Tesla also faces growing competition in China as companies like Xpeng, Nio and Automobiles increase new car release for 2023 in an attempt to challenge the dominance of the US electric carmaker.

Read more about China from CNBC Pro

Last month, Tesla discount Model 3 and Model Y vehicles in China after raising prices earlier this year due to higher raw material costs.

This is not the first time Tesla has had to recall vehicles in China. In May, the American automaker recalled more than 100,000 vehicles due to overheating problems.

— Sam Vadas of CNBC contributed to this report.


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