Over the weekend, hundreds of Tesla owners protested outside the automaker’s showrooms and distribution sites in China, seeking credits and refunds after unexpected price reductions they said indicated they had overpaid for earlier-purchased electric cars.
About 200 recent Tesla Model Y and Model 3 purchasers gathered on Saturday at a Tesla delivery facility in Shanghai to demonstrate against the American automaker’s Friday decision to lower pricing for the second time in three months.
In an effort to boost sales and maintain production at a Shanghai assembly facility, many said they had thought that the prices Tesla charged for EVs late last year would not be reduced as sharply or as drastically as the firm had disclosed. Many people rushed to complete their purchases since a government incentive was set to expire at the end of 2022.
Crowds were seen in videos shared on social media at Tesla shops and delivery hubs in other Chinese cities ranging from Chengdu to Shenzhen, implying a broader customer reaction.
Following Friday’s surprising cuts, Tesla’s EV pricing in China is currently between 13% and 24% lower than in September.
Analysts believe Tesla’s decision will increase its sales, which fell in December and compel other EV producers to lower costs as well, at a time when demand in the world’s biggest market for battery-powered vehicles is weakening.
“Price reductions are part of this EV cycle in a weaker (economy) with more competition in China,” Daniel Ives, an analyst at Wedbush Morgan who follows Tesla, wrote in a tweet on Friday.
While conventional automakers sometimes discount to manage inventory and keep factories operating when demand falls, Tesla works without dealerships and has made transparency part of its brand image.
“It may be a normal business practice but this is not how a responsible enterprise should behave,” said one Tesla owner, who provided his surname as Zhang, protesting outside the company’s delivery centre in Shanghai’s Minhang area on Saturday.
He and the other Tesla owners, who claimed to have received their vehicles in the latter months of 2022, expressed their frustration with Tesla’s lack of an explanation for Friday’s price reduction and its abruptness.
According to Zhang, the police arranged a meeting between Tesla personnel and the present owners, during which the owners presented a list of requests, including an apology and compensation or other credits. He went on to say that the Tesla team had committed to answering by Tuesday.
On Saturday, other videos purporting to show Tesla owners demonstrating were also shared on Chinese social media networks.
In one video, people can be heard yelling, “Return the money, refund our vehicles,” according to Reuters, which also confirmed that it was shot inside a Tesla shop in Chengdu, a city in China’s southwest.
Another video, which looked to be shot in Beijing, showed police vehicles coming to clear people in front of a Tesla shop.
Reuters was unable to confirm the accuracy of either video.
A representative for Tesla China told Reuters on Saturday that the company has no plans to repay purchasers who took delivery prior to the most recent price decrease.
When questioned about the demonstrations, he did not answer.
In 2021, China accounted for almost one-third of Tesla’s worldwide sales, and its Shanghai factory, which employs around 20,000 people, is the company’s single most productive and profitable unit.
Analysts are optimistic about Tesla’s price reduction driving sales growth at a time when the company is a year away from revealing its next new vehicle, the Cybertruck.
“Nowhere else in the world is Tesla faced with the kind of competitors that they have here [in China],” said Bill Russo, the Shanghai-based director of consultancy Automobility Ltd.
