A Tesla ‘recall’ applies to nearly every car the company has sold in China

“The recall is being carried out as a result of a defect investigation initiated by the State Administration for Market Regulation,” the SAMR said, offering no details of when or why the investigation began.

Tesla did not respond to a request for comment, but it issued an apology through its official Weibo account for “any inconvenience” caused to customers and pledged to “continue to improve safety in strict accordance with national requirements.”

Subscribe to Eastworld for weekly insight on what’s dominating business in Asia, delivered free to your inbox.

The recall covers over 35,000 imported Model 3 units and close to 250,000 domestically manufactured Model 3 and Model Y units. In total, that’s close to all of the vehicles Tesla has sold in China to date, according to Bloomberg.

But the recall is not really a recall in the traditional sense. Tesla owners won’t have to return their vehicles to the company for a refund or an upgrade. The software bug can—and mostly will—be patched remotely through an update that the SAMR says Tesla is rolling out for free. If certain vehicles can’t be patched remotely, then customers might have to drive them to a Tesla dealership.

Yet the SAMR framing the safety update as a recall continues the run of bad press and government scrutiny Tesla has suffered in China this year, despite the brand’s enduring consumer appeal.

Tesla is the most popular passenger electric vehicle brand in China, occupying 21% of the market in 2020. But the U.S. Company’s image has been tarnished by a series of safety issues, as well as the company’s own fumbled response to the problems.

In April, a Tesla customer staged a protest at the Shanghai auto show, climbing on top of a Tesla while wearing a T-shirt emblazoned with the words “Tesla’s brakes fail.” The customer demanded Tesla release data collected from her father’s Tesla at the time of a crash last year, arguing that faulty brakes had led to the collision.

Rather than consent, Tesla vice president Grace Tao told local media there was “no possibility Tesla will compromise” with the protester. State media slammed Tao’s response as “arrogant,” the SAMR lambasted the company too, and, a month later, a cowed Tesla announced it would allow Chinese customers access to their own vehicle data.

Analysts have watched Tesla’s China sales closely since the protest, expecting to see consumer sentiment shift away from the brand. In April, sales slumped to 25,845 units from over 35,000 in March. In June, Tesla sales climbed back 29% to 33,463 units. But the SAMR’s announcement of this latest “recall” suggests Tesla is still on a rocky road in China.