Chinese regulators have ordered U.S. electric carmaker Tesla to adhere to the country's consumer laws and ensure its product's quality and safety after buyer complaints were made.
The State Administration for Market Regulation said that the agency and four other regulators have summoned executives of the company to respond to product quality complaints it had received from buyers on maufacturing quality and flaws in equipment.
Tesla Shanghai responded to the letter sent to the company on Monday. The company said that it "sincerely" accepts the government's guidance and that it has "deeply reflected" on the issues that were brought up.
Experts pointed out that Tesla's response to Chinese regulators is a huge departure from its dealings with U.S. regulators. In 2018, Tesla's chief executive officer, Elon Musk, sparred with U.S. Securities and Exchange Commission. A year later, Musk battled with Californian authorities and rejected their recommendations.
The regulatory action against Tesla comes as the company ramps up the production of its China-made electric Model Y compact crossover in Shanghai. It also comes after the company recently conducted a global recall of its U.S. -made Model X sports utility vehicle, including units imported to China.
Tesla has made significant investments in China, a market that Musk considered to be increasingly important for the company's longevity and continued growth. Last year, Chinese sales helped the company reach a record 500,000 global deliveries.
Tu Le, the managing director of Sino Auto Insights, said that the summons issued by Chinese regulators is an early warning to Tesla. He added that regulators likely want Tesla to ensure the quality and safety of its vehicle ahead of its plans to expand its local output.
"It seems that the ministries are trying to get out in front of potential failures as Tesla ramps up Model Y production," Tu said.
