Exclusive: Tesla, under scrutiny in China, steps up engagement with regulators

indicatornews_6_800x533_L_1412601562.jpg

3/3 © Reuters. FILE PHOTO: Tesla Inc CEO Elon Musk dances onstage during a Tesla China-made Model 3 car delivery event in Shanghai 2/3

By Yilei Sun and Tony Munroe BEIJING (Reuters) – Electric vehicle maker Tesla (NASDAQ 🙂 Inc, which faces scrutiny in China over safety and customer service complaints, is pushing its engagement with regulators in mainland China and beefing up its government relations team, industry sources said. . Tesla’s change in strategy leading to more behind-the-scenes interaction with policymakers in Beijing, compared to relatively little, shows how seriously the American automaker views setbacks in its second-largest market big. It also comes at a time when China is trying to regulate large and powerful private companies, especially in the technology sector, over concerns about their dominance of the market. Tesla did not immediately respond to a request for comment on Monday, a Chinese holiday. As they do elsewhere, regulators in China, the world’s largest auto market, discuss industry policies and standards with global and local companies, industry associations, and think tanks. Manufacturers often join such meetings in China, but unlike rivals such as Toyota Motor (NYSE 🙂 and General Motors Co (NYSE :), Tesla officials were largely absent from closed-door meetings, according to four people. familiar with the matter. Instead, Tesla officials regularly speak at high-profile industry conferences. Outside of China, Tesla’s outspoken CEO Elon Musk regularly takes to Twitter to comment or criticize regulators or rules. But in recent weeks, Tesla executives have attended at least four policy discussions, on topics including car data storage, vehicle-to-infrastructure communication technologies, car recycling and carbon emissions, the people said. California-based Tesla, which makes Model 3 electric sedans and Model Y sport utility vehicles at its own plant in Shanghai, did not make major commitments at the meetings but did participate in some discussions, they said. RECRUITMENT ANNOUNCEMENTS Tesla is also expanding its government relations team in China, one of the sources said. According to two recruiting announcements in April on its WeChat account, Tesla is hiring managers to update a policy database and maintain relationships with government and industry associations to “build a harmonious external environment to support the business development of Tesla in the regional market “. It was not immediately clear how many managers Tesla planned to hire for government relations. With about 30% of Tesla’s global sales, China is the automaker’s second-largest market after the United States, helping it post record first-quarter vehicle deliveries. In recent months, pressure has been building on Tesla’s excellent relations with Beijing. In February, Chinese regulators summoned him over consumer reports of battery fires, unexpected accelerations and failure of over-the-air software updates. And in March, Tesla came under scrutiny when the military banned its cars from entering its complexes, citing safety concerns about vehicle cameras, sources told Reuters at the time. Days later, Musk appeared by video on a high-level forum, saying that if Tesla used cars to spy in China or anywhere, it would shut down. Last month, Tesla came under fire from state media and regulators after a customer, angered by the handling of his complaint about malfunctioning brakes, got into a Tesla car in protest at the Shanghai Auto Show. . Videos of the incident went viral. Grace Tao, a Tesla vice president who is spearheading its government relations effort in China, came under fire in state media last month after she was quoted in a media interview questioning whether the aggrieved customer was acting on his own. In response to the various complaints, Tesla has said it would establish a data center in China, initiate a self-inspection to improve services, and work with regulators.