Tesla will have to “recall” nearly 300,000 vehicles made in China or imported there due to a problem with an assisted driving function, China’s State Administration for Market Regulation said late on Friday.
Tesla (ticker: TSLA) apologized on Weibo, a Chinese social media site. “We apologize for the inconvenience caused by this recall to all car owners,” the company said, according toThe Wall Street Journal. “Tesla will continue to improve safety in strict accordance with national requirements.”
The notice from the Chinese regulator said that the cruise control system could be activated by accident, which could cause a collision, according to newswire service AFP. Tesla will be able to update the software for impacted customers remotely, so they will not have to return their cars, the report said. The regulator did not immediately answer a question fromBarron’son whether the issue had already led to collisions in China.
China is a key market for Tesla, which sells about 30% of its vehicles there. Sales in China have been spotty lately, with a decline in April followed by more promising May numbers. Tesla has been making vehicles at a Shanghai plant since 2019.
Lately, there have been complaints from some Chinese customers about Tesla’s quality and service, with a protest at the Shanghai Auto Show in April. Tesla apologized to customers in April for how it dealt with customer complaints.
The issues are part of a larger public relations problem that may be weighing on Tesla stock, which is down 5% this year after rising eight-fold in 2020. That said, the stock was on an upswing over the past week, perhaps related to optimism about end-of-quarter vehicle deliveries. Tesla has not announced the date of its second-quarter earnings report yet.
It’s not clear if the issue in China could also impact vehicles in the U.S. Tesla did not immediately respond to a request for comment on Saturday morning.
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