Tesla is recalling more than 80,000 cars in China. Investors will be watching to see if the reputation of the American giant will be damaged.
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You’re here is recalling more than 80,000 cars in China over software and seatbelt issues, China’s market regulator said on Friday.
The U.S. electric car giant is recalling a total of 67,698 imported Model S and Model X vehicles produced between September 25, 2013 and November 21, 2020, China’s State Administration for Regulatory Affairs said. of the market.
The recall of these models is due to a software issue that affects the cars battery management system. Tesla will update the software for these vehicles free of charge.
Elon Musk’s automaker is also recalling 2,736 imported Model 3 vehicles produced between January 12, 2019 and November 22, 2019 as well as 10,127 of the Chinese-made version of this car due to a potentially faulty seat belt. .
Tesla will check the seat belts of affected cars, the regulator said.
Tesla was not immediately available for comment when contacted by CNBC.
Investors will watch for any fallout for Tesla in China following the recall. The market is increasingly competitive with national challengers backed by Warren Buffett BYD to upstarts like Nio and Xpeng.
“Recalls are always costly and are often amplified in ways that can damage reputation — especially true now that the market has become hyper-competitive and Tesla’s backlog has shrunk,” said Bill Russo, CEO of Shanghai-based Automobility to CNBC.
“This recall mainly affects imported models (S and X), so it can be managed if they come out before.”
China is one of Tesla’s most important markets. The company has a major production facility in Shanghai and has sold a record number of Chinese-made cars in recent months.
But Tesla also faces increasing competition in China as companies like Xpeng, Nio and Li-Auto accelerate new car releases for 2023 in a bid to challenge the dominance of the American electric carmaker.
Last month, Tesla slashed the price of Model 3 and Model Y vehicles in China after raising them earlier this year due to rising material costs.
This is not the first time Tesla has had to recall cars in China. In May, the American firm recalled more than 100,000 cars due to an overheating problem.
– CNBC’s Sam Vadas contributed to this report.