Hundreds of new Tesla owners thronged the carmaker’s showrooms and distribution centers in China over the weekend, demanding discounts and credit after showroom prices suddenly fell. Owners of cars that were bought earlier believe that they overpaid for their cars.
On Saturday, about 200 recent Tesla Model Y and Model 3 buyers gathered at Tesla’s Shanghai delivery center to protest the US automaker’s decision to cut prices for the second time in three months on Friday.
Buyers are upset that the American company has sharply reduced the cost of cars. More recently, the cost of Chinese-built Model Y and Model 3 has fallen by 6-13.5%. Thus, since September 2022, cars have already become cheaper by 13-24%, and the most affordable Model 3 configuration costs less than $34,000. Such a move by Tesla may provoke a drop in the price of cars from other companies, but for newly minted Model 3 and Model Y owners, this not particularly disturbing.
While big-name automakers often discount to manage inventory and keep factories running when demand weakens, Tesla operates without dealers, and transparent pricing is part of its brand image.
‘ This may be normal business practice, but this is not how a responsible enterprise should behave,’ said one Tesla owner who protested at the company’s delivery center in the Shanghai suburb of Minghan on Saturday, who gave his surname as Zhang.
He and other Tesla owners who said they bought their cars in the final months of 2022 said they were disappointed by Friday’s sharp price cut and Tesla’s lack of explanation to recent buyers.
Zhang said police facilitated a meeting between Tesla employees and some owners, in which the protesters presented a list of demands, including an apology and compensation or other credits. He added that Tesla employees agreed to respond by Tuesday.
About a dozen police officers could be seen at the Shanghai protest, and most videos of other demonstrations also showed a heavy police presence at Tesla sites.
Protests are not uncommon in China, where people have walked out in large numbers over the years over issues such as financial or property scams, but authorities have been on high alert since large-scale protests in Chinese cities and top universities in late November against COVID-19 restrictions.
Other videos of Tesla owners protesting were also posted on Chinese social media platforms on Saturday.
In one video, which Reuters confirmed was filmed at a Tesla store in the southwestern city of Chengdu, a crowd chanted: ‘Return the money, return the money for our cars.’
Another, filmed in Beijing, showed police cars arriving to disperse a crowd outside a Tesla store.
Tesla does not plan to compensate customers who received their cars before the latest price cut, a Tesla China representative told Reuters on Saturday. He did not respond to a request to comment on the protests.
China accounted for about a third of Tesla’s global sales in 2021, and its Shanghai plant, which employs about 20,000 workers, is its single most productive and profitable factory.
Analysts are bullish on the potential for Tesla’s price cuts to spur sales growth at the time, especially amid Cybertruck delivery delays.
‘Nowhere else in the world does Tesla face the kind of competition it does here [in China],’ said Bill Russo, chairman of Shanghai-based consultancy Automobility Ltd.
‘They’re in a much larger EV market with companies that can price more aggressively than they have so far.’
