Tesla [TSLA:US] recalled 285,520 of its electric vehicles (EVs) in China due to safety concerns on their active cruise control system, as reported by Caixin on June 26. According to an announcement by the State Administration for Market Regulation (SAMR) earlier that day, the active cruise control system of certain Tesla models would be accidentally activated when drivers touch the gear selector in an attempt to shift gears or make a sharp turn, causing an accidental acceleration. Tesla later released an official letter of apology and promised to offer customers a free software update either in-person or remotely through over-the-air (OTA) technology. The recall involved 35,665 imported Model 3 vehicles, as well as 38,599 Model Y vehicles and 211,256 Model 3 cars manufactured in Shanghai.
This is not the first time Tesla recalled its vehicles due to product quality issues and faults. In 2018, the company voluntarily recalled 123,000 Model S vehicles in the US over power steering bolt failures. Last year, it recalled about 50,000 Model S and X cars in China for potentially unsafe front and rear suspensions. Furthermore, under dual pressure from China’s SAMR and the US National Highway Traffic Safety Administration (NHTSA), the company had to recall another 36,126 Model S and Model X cars in China as well as 134,951 units of these models in the US earlier this year because of frequent media control unit malfunctions.
Increasing safety concerns over Tesla’s products have contributed to the EV maker’s recent sales predicament in the Chinese market. This April, the company only sold 25,845 vehicles in China, down 27% from March. Among them, Tesla exported 14,174 units and delivered the remaining 11,671 in the country, which was down 67.1% from the 35,478 in March. In comparison, Tesla’s Chinese competitors were gaining an edge. For example, NIO [NIO:US] sold 7,102 cars this April, while the sales volumes of Li Auto [LI:US] and Xpeng [XPEV:US] were 5,539 and 5,147 units, respectively. All three numbers were more than doubled from the same period last year.