Tesla recalls over 80,000 cars in China, related software and seatbelt problems

November 28, 2022: Tesla recalls near80,000 cars in China more than software and seatbelt issues, the Chinese market regulator on Friday.

The U.S. electric car giant recalls 67,698 imported Model S and Model X vehicles created between September 25, 2013, and November 21, 2020, China’s State Administration for Market Regulation said.

The recall of these models is because of a software issue affecting the cars’ battery management system. Tesla will elevate the software on these vehicles complimentary of charge.

Elon Musk’s automaker also recalled 2,736 imported Model 3 vehicles produced between January 12, 2019, and November 22, 2019, and 10,127 of the China-made performance of this car due to a potentially faulty seatbelt.

Tesla is checking the seatbelts on the affected cars, the regulator added.

Investors will watch for any fallout from Tesla in China recall. The market is heightened competitive with household challengers from Warren Buffett-backed BYD to upstarts such as Nio and Xpeng.

“Recalls are always costly, and following get amplified in a way that can be damaging, especially true as the need has become hyper-competitive and Tesla’s backlog is shrinking,” Bill Russo, CEO at Shanghai-based Automobility, said.

“This recall impacts imported models, so it can be maintained if they get out in front of it.”

China is one of Tesla’s important markets. The company has a significant production factory in Shanghai and sells a record number of China made-cars in law months.

But Tesla also faces increasing competition in China as corporations like Xpeng, Nio and Li Auto ramp up recent car releases for 2023 to challenge the U.S. electric automaker’s dominance.

In the previous month, Tesla slashed the prices of Model 3 and Model Y vehicles in China after increasing them earlier this year because of the higher material costs.

It has happened before that Tesla has had to recall automobiles in China. The U.S. firm recalled over 100,000 cars in May due to an overheating issue.