Tesla Inc, which is under fire in China for safety and customer care issues, is beefing up its government affairs staff and its interaction with mainland regulators, according to industry sources. Tesla’s shift in approach, which has resulted in more behind-the-scenes dialogue with Beijing officials than before, demonstrates the urgency with which, the American automaker sees losses in its second-largest market. It also comes at a time when China is attempting to control large and influential private corporations, especially in the technology field, due to market domination concerns.
On Monday, a Chinese public holiday, Tesla did not immediately respond to a request for comment. Regulators in China, the world’s largest car sector, meet with multinational and local firms, business bodies, and think tanks to address industry strategies and regulations, much as they do elsewhere. According to four people familiar with the situation, Tesla officials were largely absent from the closed-door sessions, unlike rivals such as Toyota Motor and General Motors Co.
Tesla executives, on the other hand, are often invited to appear at high-profile business events. Outside of China, Elon Musk, Tesla’s outspoken CEO, often uses Twitter to comment on, or criticise regulators and regulations. Tesla executives, on the other hand, have attended at least four policy meetings in recent weeks, according to the people, on issues such as auto data collection, vehicle-to-infrastructure connectivity technology, automotive recycling, and carbon emissions. Tesla, based in California, which produces hybrid Model 3 sedans and Model Y sport-utility vehicles at its Shanghai factory, did not make any big commitments at the meetings, but did engage in some discussions, according to the sources.
According to one of the reports, Tesla is also expanding its government affairs unit in China. Tesla is recruiting managers to upgrade a policy database and establish partnerships with government and industry organisations, to “create a harmonious external ecosystem to help Tesla’s business growth in the regional sector,” according to two recruitment ads posted on its WeChat account in April.
It was not immediately clear how many government affairs managers Tesla planned to employ. China is Tesla’s second-largest market after the United States, accounting for nearly 30% of global sales and contributing to the automaker’s record first-quarter vehicle deliveries. Tesla’s mostly excellent ties with Beijing have come under the scrutiny in recent months.
Consumer warnings of battery explosions, sudden speeding, and failures in over-the-air app upgrades prompted Chinese regulators to summon it in February. In March, the military barred Tesla cars from entering its complexes, citing security worries about vehicle cameras, according to Reuters’ reports at the time. Musk spoke on camera at a high-level conference a few days later, warning that Tesla would be shut down if it used cars to spy in China or somewhere else. Last month, state media and regulators targeted Tesla after a customer, enraged about how her query about malfunctioning brakes was treated, climbed on top of a Tesla car in protest at the Shanghai auto show. The event was captured on video and went viral.
Last month, state media chastised Grace Tao, a Tesla vice president who oversees the company’s government affairs efforts in China, after she was quoted in a media report asking whether the aggrieved consumer was behaving on her own. Tesla has responded to the various concerns by announcing the establishment of a China data centre, the start of self-inspection to boost facilities, and collaboration with regulators.
