Beijing’s targeting of Tesla for the electric vehicle maker’s bungled handling of a high-profile customer protest has exposed a weakness in the US group’s China business as competition intensifies in the world’s largest car market.
Tesla has been plunged into a publicity crisis in the country after China’s state media accused the company of “being arrogant” in its approach to a spat with a customer who claimed that a malfunction caused her vehicle to crash.
The unwanted attention comes at a delicate time for Tesla, whose position as market leader in China is coming under pressure from local challengers, as traditional automakers, start-ups and technology groups flood a fast-growing segment that still only accounts for 5 per cent of the country’s vehicle sales.