Tesla owners in China are protesting surprise price cuts they missed from Reuters

Tesla owners in China are protesting surprise price cuts they missed from Reuters

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©Reuters. People protest at a Tesla showroom in Chengdu, Sichuan, China published January 6, 2023 in this image obtained from social media by Reuters. /via REUTERS 2/3

SHANGHAI (Reuters) – Hundreds of Tesla (NASDAQ:) owners rallied at the automaker’s showrooms and distribution centers in China over the weekend, demanding rebates and credit after sudden price cuts they said were overpaying for previously purchased electric cars had.

About 200 new Tesla Model Y and Model 3 buyers gathered at a Tesla delivery center in Shanghai on Saturday to protest the US automaker’s decision to cut prices for the second time in three months on Friday.

Many said they believed the prices Tesla was charging for its cars late last year would not be cut as abruptly or as deeply as the automaker just announced to boost sales and ramp up production at its Shanghai plant support. The planned expiry of a state subsidy at the end of 2022 also drove many to conclude the purchase.

Videos posted to social media showed crowds at Tesla stores and delivery centers in other Chinese cities from Chengdu to Shenzhen, suggesting a broader consumer backlash.

After Friday’s surprise discounts, Tesla electric vehicle prices in China are now between 13% and 24% below September levels.

Analysts said Tesla’s move would likely boost sales, which plummeted in December, and force other EV makers to cut prices as well at a time of slowing demand in the world’s largest battery-powered car market.

While established automakers often offer discounts to manage inventories and keep factories running when demand slacks, Tesla operates without dealerships and transparent pricing is part of its brand image.

“It may be normal business practice, but that’s not how a responsible company should behave,” said a Tesla owner who protested outside the company’s delivery center in the Minhang suburb of Shanghai on Saturday, giving his last name as Zhang.

He and the other Tesla owners, who said they received the delivery in the final months of 2022, said they were frustrated by the suddenness of Friday’s price cut and the lack of an explanation from Tesla to recent buyers.

Zhang said police facilitated a meeting between Tesla employees and the assembled owners, where the owners presented a list of demands, including an apology and compensation or other credit. He added Tesla employees have agreed to respond by Tuesday.

About a dozen police officers were seen at the protest in Shanghai, and most videos from the other demonstrations also showed a large police presence at Tesla locations.

Protests are not uncommon in China, where over the years people have turned out in large numbers over issues such as financial or property fraud, but authorities were on heightened alert against COVID-19 after widespread protests in Chinese cities and top universities at the end of November -Restrictions.


Other videos that appear to show Tesla owners protesting were also posted to Chinese social media platforms on Saturday.

A video, which Reuters confirmed was filmed at a Tesla store in the southwestern city of Chengdu, showed a crowd chanting, “Return the money, refund our cars.”

Another, apparently filmed in Beijing, showed police cars arriving to disperse crowds outside a Tesla store.

Reuters could not verify the content of either video.

Tesla does not plan to compensate buyers who received the shipment before the recent price cut, a spokesman for Tesla China told Reuters on Saturday.

He did not respond when asked to comment on the protests.

China accounted for about a third of Tesla’s global sales in 2021, and the Shanghai plant, which employs about 20,000 people, is Tesla’s most productive and profitable plant.

Analysts have been positive about the potential of Tesla’s price cuts to spur sales growth at a time when it’s a year after the announcement of its next new vehicle, the Cybertruck.

“Nowhere else in the world does Tesla face the kind of competition they have here [in China]said Bill Russo, head of Shanghai-based consultancy Automobility Ltd.

“You’re in a much larger EV market with companies that can price more aggressively than they previously could.”

In 2021, Tesla faced a PR storm after a dissatisfied customer climbed onto a car at the Shanghai Auto Show to protest the company’s handling of her complaints about her car’s brakes.

Tesla then apologized to Chinese consumers for not addressing the complaints in a timely manner.

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