Tesla Mulls Closing Showrooms In China

Tesla is reevaluating the way it sells electric cars in China, its second-largest market, and considering closing some showrooms in flashy malls in cities like Beijing where traffic plunged during COVID restrictions, two people with knowledge of the plans said, Zhang Yan and Brenda Goh reported for Reuters.

Photo Insert: The US automaker sold 400,000 China-made Model 3 and Model Y cars in the first eight months of the year, with 60% of them sold locally.

The shift would put more emphasis on stores in less-costly suburban locations that can also provide repairs as the company works to meet Elon Musk's goal of improving service for existing customers, many of whom have complained of long delays, they said.

As part of that push, Tesla is looking to ramp up hiring of technicians and other staff for service jobs in China, one of the people said. Tesla's China recruitment website showed more than 300 openings for service jobs as of Thursday. Tesla has 200 stores in China.

Musk said last week on Twitter, in response to a Tesla owner in Texas who complained that he had been waiting a month to get his vehicle fixed, that he had made "advancing Tesla service to make it awesome" a top priority.

The carmaker has been the target of a series of customer complaints and lawsuits in China, including a well-known case last year which saw an unhappy owner clamber atop a Tesla at the Shanghai auto show to protest the company's handling of her complaints about malfunctioning brakes.

The incident received significant attention in China and prompted state media outlets to criticize the company. Tesla later apologized to Chinese consumers for not addressing the complaints in a timely manner and pledged to review its service operations.

The US automaker sold 400,000 China-made Model 3 and Model Y cars in the first eight months of the year, with 60% of them sold locally, according to the China Passenger Car Association. That was 67% more than a year ago.

The change in Tesla's approach in China, where it has become the second-largest EV brand behind BYD, would reflect a recognition that it has to build customer loyalty now that it has established its brand in the world's largest car market, one analyst said.

"It's not necessary to open showrooms in expensive shopping malls, especially when the repair business has become lucrative," said Yale Zhang, managing director at Shanghai-based consultancy Automotive Foresight.

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