Tesla’s China Sales Rebound in May Despite Customer Complaints and Government Scrutiny

(Source: AFP/Getty Images)

Tesla’s deliveries in China unexpectedly surged in May after a short-lived downturn, following which the company regained its throne in the national electric vehicle (EV) market despite a backlash over issues with quality and data protection.

The EV pioneer shipped 21,936 vehicles to Chinese customers in May, a 88% rise from a month before, but still well below the 35,478 it delivered in March, the China’s Passenger Car Association (CPCA) said on Tuesday.

Tesla reported wholesales of 33,463 China-built cars last month, including exports, a 29% jump from 25,845 in April and a 202% increase compared to the same period last year.

In April, the company sold 27% fewer made-in-China cars versus March, according to the CPCA.

Earlier this month, tech news website The Information reported that the EV maker’s customer orders in China dropped by almost half to about 9,800 in May from more than 18,000 in April, citing unmanned sources with knowledge of internal data. The report cast doubts on Tesla’s health in the world’s largest automotive market, and sent the company’s stock on a 5.3% slide last Thursday – down more than 30% from its late January peak.

Tesla did not immediately respond to Pandaily’s request for comments on the report.

According to the firm’s website, delivery typically takes 1 to 3 weeks after a Chinese customer places an order for a Model X or a Model Y, meaning that it would only be clear in mid-June or July whether the automaker’s China orders in May had significantly fallen.

Tesla’s May sales in China show that the company has resilience to adverse publicity and heightened regulatory pressure. In recent weeks, news of traffic accidents involving Tesla vehicles have gone viral on Chinese social media after an angry customer climbed atop a Tesla car at the Shanghai Auto Show in April to protest the automaker’s alleged brake failures. Following the incident, the state-backed Global Times branded Tesla as “arrogant,” and the Chinese government’s central disciplinary commission issued a warning statement to the company.

In an April post on its Weibo account, the US carmaker assured customers it takes quality criticism seriously. “We value every client, therefore we publicly pledge to take full responsibility if there are any issues regarding Tesla’s products,” it said.

Last month, Tesla announced it set up a data center in China to store local user information, as the company faces mounting concerns over privacy and customer data collection in the country. Reuters and The Wall Street Journal previously reported that Chinese authorities have restricted the use of Tesla vehicles by military personnel and employees of sensitive state-owned companies, citing risks that data from the onboard cameras could be collected and transmitted to the carmaker’s US servers.

SEE ALSO: Tesla Builds Data Center in China Amid Increasing Privacy Concerns

In 2019, Tesla became the first foreign car manufacturer to operate a wholly-owned factory in China with the opening of its Shanghai plant. It began delivering China-made Model 3 vehicles to customers last year, and China-made Model Y cars this year.

China is currently the company’s second-largest market globally. Last year, Tesla sold 120,000 units in the country, accounting for about 30% of its total 2020 deliveries.

“Sales of Tesla will hardly be affected by the short-term negative impact,” Cui Dongshu, the CPCA’s secretary-general, said at a press briefing, Bloomberg reported. Cui noted that he expects even higher local sales of Tesla vehicles in June.