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Paranoid China wants to tame Elon Musk, will it succeed? All you need to know about the brewing war between China and Tesla

It is difficult to tell if Musk's charm offensive will bear fruit because the Chinese problem with Tesla has more to do with the Communist regime's boundless paranoia and inherent mistrust of foreign business, rather than anything which Musk can actually solve.

For a week now, Elon Musk headed Tesla has been facing a pressure campaign in China with Chinese Communist state-backed media and regulators going after the electric automobile company for allegedly disregarding a Chinese Tesla customer’s complaints about her car. The issue blew into the mainstream after the allegedly aggrieved customer protested against Tesla at the Shanghai Auto Show on Monday.

China is a huge potential market for Tesla and any disruption in tapping that market could result in huge financial consequences for Tesla and its investors. Whilst the institutions in China are apparently attacking Elon on the pretext of car complaints, some critics have suggested that this Chinese pressure campaign on Tesla is because of the inherent paranoia and mistrust of CCP elites against foreign business, especially Western business.

On Monday, a woman who claimed to be an aggrieved Tesla customer, stood on top of a Tesla car at the Shanghai Auto Show wearing a T-shirt which read “brakes don’t work” in Chinese. She was protesting Tesla for the alleged brake failure of her Tesla car. This issue is somewhat viral in Chinese social media, with many Chinese social media users claiming to have brake issues with their Tesla cars.

A video of the incident at the Auto show event was released by Chinese state media The Global Times and went viral.

The woman was identified the very next day by Shanghai police and sentenced to 5-day detention for disturbing public order. After the incident, Tesla alleged that the woman got into an accident in February because of “speeding violations”. Tesla also revealed that they had been in negotiations with the woman for two months, alleging that the woman did not allow for a third-party investigation and instead wanted a refund for her car.

Tesla under attack from State Media and Communist Chinese State

In an interview with Chinese news publication Caijing, Tesla’s vice-president for China, Tao Lin claimed that the woman hoped for a high level of compensation which Tesla has no reason to give to her.

In a post on Chinese social media platform Weibo, Tesla said that it would not compromise with “unreasonable demands”.

The Chinese state media and the government reprimanded Tesla in tandem, with the State media publishing a string of critical editorials about Tesla and the central disciplinary commission of the Chinese government issuing a warning to Tesla.

“The arrogant and overbearing stance the company exhibited in front of the public is repugnant and unacceptable, which could inflict serious damage on its reputation and customer base in the Chinese market.”, an editorial in the Chinese-backed The Global Times reads.

According to American news broadcaster CNBC’s translation, another Chinese state media article titled “Three lessons Tesla ought to learn”, cautioned the U.S. electric automobile company to not be “arrogant” and “respect” the Chinese consumer market.

China has always been skeptical of foreign ventures opening up in China, being infamous for engaging in censorship and banning foreign businesses from opening up in China. In 2009-10, China banned three of the biggest websites on the planet, Google, YouTube, and Facebook, arguably in order to impede the free flow of uncensored information to the Chinese people. This is a classical example of the paranoia which is at the center of the Chinese Communist regime.

In two Weibo posts on Monday and Tuesday, Tesla apologized to the woman customer for not solving her car problems in a time-bound manner. Tesla also said that it is willing to co-operate with the authorities. The company has further stated that it will carry out “self-examination and self-correction” to “rectify” problems with its customer service process.

On Thursday, Tesla said that it has handed over the raw data vehicle 30 minutes before the crash to the aggrieved woman customer. The company is also in dialogue with two Chinese market regulators.

The rise of Tesla in China

Tesla has focused heavily on China in the past couple of years, with Elon Musk himself attending the groundbreaking ceremony of the first non-U.S. Tesla factory in Shanghai, China in 2019. In 2020, Tesla started delivering the Model 3 vehicles manufactured at the Shanghai factory to Chinese customers.

Tesla’s sales in China more than doubled in 2020, with Tesla’s Model 3 vehicle becoming the best-selling electric car in China.

Tesla’s CEO Elon Musk met with Chinese Premier Li Keqiang in 2019. But with all this success, also comes scrutiny, probing, and investigation.

Rising scrutiny by China of Tesla and Elon Musk

Negative press about Tesla has increased in China over the past few months. In January of this year, a Tesla Model 3 reportedly exploded in a Shanghai parking lot. A Chinese state media article reported that there have been at least 10 instances in 2020 of Tesla drivers losing control of their car in China.

China has also reportedly restricted the use of Tesla cars for official purposes among state and military personnel over concerns regarding the vehicle’s sensors which can record images of its surrounding areas. The Chinese military has banned the entrance of any Tesla car in military complexes, citing security concerns over vehicle cameras. This is another manifestation of the Communist regime paranoia, which must believe that Musk is some sort of Western intelligence asset using his Tesla cars to spy on China, instead of a bonafide businessman looking for mutual benefit.

In response to the spying allegations, Musk correctly said that his company would be shut down if it used Tesla cars to spy on people.

“There’s a very strong incentive for us to be very confidential with any information,” Musk told a prominent Chinese forum during a virtual discussion. “If Tesla used cars to spy in China or anywhere, we will get shut down.”

Back in February, China’s market regulator, the State Administration for Market Regulation, met with Tesla’s local subsidiaries over increasing consumer complaints of vehicle problems. On Wednesday, the same regulator issued a statement saying it places high importance on the Shanghai auto show incident. The authority also said that it has instructed local regulators to protect consumer interests.

Elon Musk has sought to fend off all of this scrutiny. In March, he gave an interview to China’s state broadcaster CCTV saying that the future of China is “going to be great” and that China will be Tesla’s “biggest market.”

However, it is difficult to tell if Musk’s charm offensive will bear fruit because the Chinese problem with Tesla has more to do with the Communist regime’s boundless paranoia and inherent mistrust of foreign business, rather than anything which Musk can actually solve. Chinese state apparatchik and Editor-in-Chief of the CCP propaganda Global Times, Hu Xijin perfectly explains that unless Musk ingratiates himself with the Chinese communist regime and its laws, China will always view him with an eye of suspicion.

“Our ultimate goal is to make foreign companies adapt to the Chinese market, seriously abide by Chinese laws and regulations, respect Chinese culture and consumers, and become a positive element in the Chinese economy. Whether it is a lesson or help, it all points to the same goal.” explains the Editor-in-Chief of CCP propaganda tabloid Global Times.

 

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Staff reporter at OpIndia

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