Tesla faces backlash in China from viral video | Voice of America
In 2018, Elon Musk signed an agreement with the Shanghai municipal government to open a Tesla vehicle manufacturing plant, making him the first non-Chinese automaker to have a subsidiary in China since the 1990s.
Today, the company is facing a backlash from its electric car business in this country.
And, experts say, using anti-American public sentiment, the ruling Chinese Communist Party (CCP) makes a decision against Tesla which is well known to foreign companies with technologies it covets: To stay in the lucrative market from China, a company must share its technology with Beijing.
“There is no doubt in my mind that the CCP is squeezing American society through a controlled explosion of anti-American xenophobia due to Tesla’s phenomenal success in China, its advanced technology, and its close involvement in American space programs. Said Miles Yu., A senior researcher at the Hudson Institute who specializes in the military and diplomatic history of the United States and China, as well as in American policy towards China.
On May 2, Musk’s SpaceX ended its first commercial crew, a long-running endeavor with NASA, returning four astronauts to Earth after six months aboard the International Space Station.
Chinese authorities gave the green light to Tesla’s plan to build a factory in Shanghai in July 2018.
According to Tesla’s U.S. Security and Exchange Commission (SEC) filing for 2020, the local government has granted Tesla Gigafactory Shanghai incentives to use in qualifying capital investments and a tax rate for companies by 15% for 2019 to 2023.
This rate is lower than the statutory corporate tax rate of 25% in China, according to accounting firm PwC China. China has also exempted Tesla’s electric vehicles from its purchase tax, the Ministry of Industry and Information Technology (MIIT) said on August 30, 2019. The 10% purchase tax exemption could reduce the cost of purchasing a Tesla by up to 99,000 yuan ($ 13,957.82), according to a post on Tesla’s social media WeChat account, and Retweeted on China’s Twitter-like platform Weibo.
The company announced that it will start selling the Chinese-made Model 3 on January 25, 2020, which is the Lunar New Year. Tesla exceeded that target by delivering its first cars at the end of December, less than a year after innovating in Shanghai.
Tesla sold more than 137,000 Model 3s in 2020, making it the best-selling electric car in China, according to the China Passenger Vehicle Association.
According to the SEC filing, Tesla’s 2020 revenue in China grew 124% year-over-year to sales of $ 6.6 billion.
Then China turned around.
Earlier this year, the Chinese military banned Teslas from entering military barracks and family quarters, citing security concerns about on-board cameras, according to the Wall Street Journal, which first published the ban. March 19.
There are eight cameras in a Model 3 – three on the front, two on each side, and one on the rear – which are used for the autopilot, security system and dashcam, according to Car and Driver. Cameras can get data including when, how and where vehicles are used, as well as cell phone contact lists synchronized with them. Beijing was concerned that some data could be sent back to the United States, according to the Journal.
On March 20, Musk assured members of the government-backed China Development Forum in Beijing that cars do not spy and that data collected on cars in China is kept in China.
VOA reached out to Tesla in the United States and China, where VOA reached out to Tesla’s media offices and the Shanghai sales center to request an interview about possible pressure from Chinese authorities and concerns about technology transfers. The company did not respond.
Then, on April 19, at the Auto Shanghai 2021 show, a Tesla owner climbed onto the roof of a Model 3 and shouted “Tesla brakes fail”, giving voice to a problem that customers claimed to have found in a car. part of his China. makes cars.
A Tesla owner climbed onto the roof of a car at the Tesla booth to protest her car’s brake malfunction at the Shanghai auto show on Monday. The stand increased its security after the incident. pic.twitter.com/ct7RmF1agM
– Global Times (@globaltimesnews) April 19, 2021
The video of the woman, identified only as Zhang, has gone viral.
Tesla responded within hours on Weibo, a Chinese platform similar to Twitter, saying, “We will not respond to unreasonable customer requests.”
The remark drew enough criticism online that the Chinese state-owned media, controlled by the CCP, rushed in and accused Tesla of being “arrogant.”
Later on April 19, Tesla posted: “We apologize and reflect (on our behavior).”
But netizens were turning their criticism of Tesla into overdrive as Zhang’s remarks touched many Chinese Tesla owners, and within days his post had more than 220 million views on Weibo. For comparison, Tesla sold just under 635,000 vehicles in China in 2019 and 2020, according to Nikkei Asia, which used figures from the China Passenger Car Association.
On April 20, the company posted on its Weibo feed, “Tesla complies and obeys the decisions of relevant government departments, respects consumers, abides by laws and regulations, and actively cooperates with all investigations from relevant government departments. … We will do our best to meet the demands of car owners and do our best to meet them.
On April 22, Hu Xijin, editor-in-chief of Global Times, an official Chinese state-owned media outlet, posted on his Weibo account: “I believe Tesla is feeling the harshness of the rules in the Chinese market, as well as its strength and dignity, and they will understand that only practical adjustments can restore public confidence.
On April 23, Xinhua, a Chinese state media outlet, published an article criticizing Tesla’s apology as “insincere” and calling on Tesla to respect Chinese consumers.
Private companies in China
Tu Le, an analyst at Sino Auto Insights, a research organization, told Reuters: “Social media has always been dissatisfied with Tesla’s quality and service issues in China. Until Tuesday, these issues were basically ignored by the local Tesla team. “
Zack Cooper, senior researcher at the American Enterprise Institute, believes Tesla’s shift in attitude is common among private companies operating in China. If a company wants to be successful in China, it has to make CCP-compliant statements that can be “problematic,” he said.
In the face of online outcry from the Chinese public and the resulting official media coverage, Tesla has taken Tesla from start to finish with the CCP.
According to Cooper, who spoke to VOA by phone, this is a concern “on the American side – does Elon Musk have to say certain things about China or the Communist Party in order to continue to operate (a) business in China?” ? “
Cooper continued, “If you operate in China, then the Communist Party has some ability to regulate your business activities. Obviously, part of this is legal and not problematic. Other parts that involved political influence which I think are problematic. … So I think there are broader questions… about the types of activities that companies are required to engage in, and the types of policy statements they need to make or support, if they want to operate on the Chinese market significantly.
Yu, of the Hudson Institute, told VOA Mandarin that what happened to Tesla is a common “bait and change” strategy that China is using on foreign investment with critical technologies and proprietary innovations.
Yu said China attracts a foreign company “to China with preferential tax and regulatory treatment.” Once you are addicted to China and achieve initial success, the CCP will not hesitate to use your investments in China as leverage to force you to comply with a whole list of demands, direct or subtle, including sharing proprietary technology and knowledge, prohibiting the transfer of funds outside of China, reducing your market share in China, and potentially disclosing critical national security secrets in your company’s other operations with the U.S. government, such as the SpaceX project. “