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Tesla owners in China are protesting the steep price cuts they missed out on


Shanghai
Reuters

Hundreds of Tesla owners flocked to the carmaker’s showrooms and distribution centers in China over the weekend, seeking rebates and credits after a sudden price cut, which they said overpaid electric cars they had previously bought.

On Saturday, about 200 recent Tesla Model I and Model 3 customers gathered at Tesla’s Shanghai delivery center to protest the US automaker’s decision to cut prices for the second time in three months on Friday.

Many said they believed the prices Tesla charged for its cars late last year would not be cut as sharply or as deeply as the automaker just announced in an effort to boost sales and support production at its Shanghai factory. The planned expiration of the government subsidy at the end of 2022 also prompted many to end their purchases.

Videos posted on social media showed crowds at Tesla stores and delivery centers in other Chinese cities from Chengdu to Shenzhen, suggesting a broader consumer backlash.

After Friday’s surprise discounts, Tesla’s electric vehicle prices in China are now between 13% and 24% below September levels.

Analysts say Tesla’s move is likely to boost its sales, which fell in December, and force other electric vehicle makers to also cut prices at a time of weakened demand in the world’s biggest market for battery-powered cars.

Tesla's sign is seen at its factory in Shanghai, China, on May 13, 2021.

While established automakers often make concessions to manage inventory and keep factories running when demand falters, Tesla operates without dealers and transparent pricing is part of its brand image.

“It may be a normal business practice, but a responsible company should not behave like that,” said one Tesla owner who protested at the company’s delivery center in the Shanghai suburb of Minhang on Saturday, who gave his surname as Zhang.

He and other Tesla owners, who said they took delivery in the final months of 2022, said they were frustrated by Friday’s sharp price cut and Tesla’s lack of explanation to recent buyers.

Zhang said police facilitated a meeting between Tesla staff and the assembled owners where the owners submitted a list of demands, including an apology and compensation or other credits. He added that Tesla staff had agreed to respond by Tuesday.

A dozen police officers could be seen at the Shanghai protest, and most videos of other demonstrations also show a heavy police presence at Tesla locations.

Protests are not uncommon in China, which has seen people walk out in large numbers over the years over issues such as financial or property fraud, but authorities were on alert after widespread protests in Chinese cities and top universities at the end of November against Covid restrictions -19.

Other videos appearing to show Tesla owners protesting were also posted on Chinese social media platforms on Saturday.

One video, which Reuters confirmed was taken at a Tesla store in the southwestern city of Chengdu, showed a crowd chanting: “Return the money, return our cars.”

Another, which appeared to have been filmed in Beijing, showed police cars arriving to disperse a crowd outside a Tesla store.

Reuters could not confirm the content of any of the videos.

Tesla has no plans to compensate customers who delivered before the latest price cut, a Tesla spokesman in China told Reuters on Saturday.

He did not respond when asked to comment on the protests.

China accounted for about a third of Tesla’s global sales in 2021, and its Shanghai factory, which employs about 20,000 workers, is its single most productive and profitable factory.

Analysts were bullish on the potential for Tesla’s price cuts to boost sales as it comes a year after announcing its next new vehicle, the Cybertruck.

“Nowhere else in the world does Tesla face such competitors as it does here.” [in China]”said Bill Russo, head of consultancy Automobility Ltd in Shanghai.

“They’re in a much bigger EV market with companies that can price more aggressively than they can, until now.”

In 2021, Tesla faced a public relations firestorm after an unhappy customer climbed onto a car at the Shanghai Auto Show to protest the company’s handling of her complaints about her car’s brakes.

Tesla responded by apologizing to Chinese consumers for not responding to complaints in a timely manner.

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