The News
China said that Tesla is recalling more than 1.6 million vehicles over concerns that its autopilot feature could cause collisions.
The electric vehicles (EVs), including imported Model S, Model X, and Model 3 sedans, as well as Chinese-made Model 3 sedans and Model Y SUVs, will be given an over-the-air software update to fix the issue, but Chinese regulators are still labeling the update as a “recall.” This comes a month after the U.S. recalled nearly all 2 million Tesla cars on American roads over similar concerns.
Prior Tesla brake issues and delayed customer service in China had sparked rare protests supported by state media, and the company was ultimately forced to apologize over their handling of some complaints.
The recall is the latest setback for Tesla in the Chinese market, with domestic makers having a particularly strong 2023 and China’s BYD overtaking Tesla as the world’s largest EV seller.
SIGNALS
Tesla co-founder warns not to think of an electric car like an iPhone
The “autopilot crap” is more of a threat to Tesla’s success than other EV competitors, Tesla co-founder and former CEO Martin Eberhard told Business Insider last year. Musk has repeatedly branded Tesla “as much a software company as it is a hardware company,” but Eberhard opined that it wasn’t that simple. “It’s not the same” to think of a vehicle as an iPhone, he said. While a glitch in an iPhone is merely an “annoyance,” he said, a bug in vehicle software that controls the brakes “can kill you.” Ebherard added that he thought Musk was too preoccupied with autonomous cars to successfully lead Tesla.
Tesla is battling Chinese EV competitors with memes — but social media users aren’t impressed
While Tesla’s Model 3 remains the most popular EV car in China, the automaker is facing fierce competition from domestic EV companies that broke multiple sales and production records last year. Tesla is now on the social media defensive to lure more buyers. On Douyin — China’s version of TikTok — Tesla has released ads that use memes to mock its competitors: blurring out the face of one EV CEO and pointing to his low development rate, comparing the aesthetic of one competitor’s cars to “house furniture” like sofas and refrigerators, and likening the batteries of one EV maker to a chubby, flexing cartoon figure.
But many Chinese social media users on Weibo said the ad campaign appears desperate and hypocritical given Tesla’s prioritization of software over safety, the Chinese EV news site Electric Planet reported. “I obviously think about watching TV while I drive,” joked one user. “What I actually need is a car that is easy to drive, has low wear and tear, is safe, and has good reliability when I need it most.”
Tesla stock hasn’t taken much of a dint — but that could change
The automaker’s share price has continued to grow despite numerous recalls this year, with a year-on-year growth of more than 110% as of Jan. 5. Some, like analyst Craig Irwin, warned that Tesla’s stock price is “egregiously” overvalued, and that its shares could drop some 65% in a “tough” 2024 as investors realize, “there’s nothing Tesla has that Toyota does not,” Irwin told CNBC. He questioned why Tesla’s stock price is significantly higher than Toyota’s if Tesla is only “going to sell a fraction of the vehicles” compared to Toyota.
