18 February 2019
Delivery delays have taken the shine off Tesla for some buyers in China. Photo: Bloomberg
Delivery delays have taken the shine off Tesla for some buyers in China. Photo: Bloomberg

Is Tesla too popular for its own good?

Maybe it’s all because the US e-car maker is too popular in China.

Tesla chief Elon Musk was on the ground in China overseeing deliveries of the company’s sleek Models S sedans and unveiling superchargers in Beijing and Shanghai earlier this week.

He’s hailed by some as a Silicon Valley icon to rival the late Steve Jobs but not everyone is sweet on Musk. A number of Model S buyers who prepaid for their e-cars months ago are less than impressed that they have to wait for their wheels while those in Beijing and Shanghai — who didn’t pay upfront — took possession on Tuesday.

Media reports say that up to 23 buyers from outside the two major cities have protested about the delivery arrangements and threatened legal action in a letter to Tesla China chief executive Veronica Wu {吳碧瑄}. The Economic Observer reports that all of the 23 buyers paid the 250,000 yuan (US$41,035) deposit and the rest of the money last year, with Tesla sales staff promising back then that deliveries would be linked to when they paid, not where they lived.

The idea of owning a Tesla is just as popular with people outside as well as inside the political and financial capitals. When preorders opened in August last year, the first Model S buyer was the 24-year-old son of a wealthy factory owner in Jinhua {金華}, a lesser-known prefectural level city in the eastern province of Zhejiang. But buyers beyond Beijing and Shanghai’s city limits weren’t warned of any delivery problems until they learnt that those in the two centers were getting their cars and their country cousins weren’t. That’s when they complained to Tesla China about regional discrimination.

Tesla China said the delay is due to the overwhelming orders that constantly exceed its plants’ capacity. It said Tesla has to do on-site tests to ensure the cars conform with the buyer’s household charging facilities and that such tests can only be done by trained staff sent by Tesla service centers.

The firm has just one service center up and running in Beijing and another one opening in Shanghai this week. And the firm only plans to expand service networks into Guangzhou, Shenzhen and Chengdu later this year. This means that only buyers from these cities can expect to get their cars in time.

A Tesla buyer from Shandong province said no one bothered to inform him of all these uncertainties when he paid the money in full in December, but now he has been told to keep waiting or cancel the order and get his money back in three months.

The 21st Century Business Herald reported Wednesday that Musk apologized in Beijing to a dozen buyers over shipping waits, promising to deliver the vehicles within the next eight weeks. On top of that, they received a letter of apology and were assured that their cars will be shipped to Shanghai in May and delivered no later than June.

It seems there will be a happy ending but there is a hitch: buyers outside Beijing and Shanghai who wish to get their cars as soon as possible have been asked to sign a disclaimer clause. “It means that you must shut up if there is any trouble with charging facilities or after-sales service,” one buyer told the Observer.

Analysts say Tesla underestimated sales in China and thought orders would just come from the country’s major cities so it took time to build service centers there. Red tape also complicated the process.

But the truth is that the brand has already become a big name among many prospective car buyers across the nation and unless Tesla can improve its supercharger checks and after-sales service, many buyers may lose patience and switch to electric and hybrid offerings from mainstream rivals like Toyota, whose service network has penetrated into virtually all counties and major townships.

– Contact the writer at [email protected]


EJ Insight writer

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