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Electric automaker Tesla (NASDAQ: TSLA) is one of the most productive U.S. corporations to manage its appointments with China and the Chinese authorities. After all, Tesla recently won preferential interest rates from Chinese state banks to build its meetinghouse in Shanghai, and minority investor Tesla Tencent (OTC: TCEH). And) recently promoted the Tesla logo in its hit mobile game, Peacekeeper Elite.
Overall, China has welcomed Tesla basically with open arms, as the country is trying to inspire the purchase of electric cars to reduce the country’s problematic air pollution.
However, things are not entirely concomitant between China and Tesla at this time. Recently, China reduced the value of cars eligible for its electric vehicle subsidies to a point of value under the popular Style 3. In response, Tesla would possibly have to lower its value in China by approximately 7.3%.
Not only that, but Tesla recently faced a challenge with Pinduoduo (NASDAQ: PDD), a discounted e-commerce that has spread to China in recent years. Recently, Pinduoduo showed up to subsidize five random Tesla consumer purchases if another 10,000 people signed up for a promotion in July.
But Tesla refused to hand over the cars to the winners of the contest-type offer, even if the automaker had won the full prize for the cars. This is why.
Tesla’s sales approach is unique in the automotive industry. Part of the style and promise of the company logo is that it controls every single component of the process, from the vertical integration of its own proprietary chips and batteries to direct sales to customers, without going through classic distributors.
The well-meaning Pinduoduo contest has inserted a third party between Tesla and its visitor, or that’s what Tesla says. Pinduoduo, along with its offering partner, Chinese car dealership Yiauto, never owned Model 3 vehicles, according to the South China Morning Post. Instead, Pinduoduo organized sales directly between Tesla and visitors, then subsidized the acquisition to the visitor in a separate transaction.
At first, investors might think, “Why would Tesla do that?” After all, the electric vehicle manufacturer gained the full value of the vehicle, not the subsidized value presented at Pinduoduo. In addition, the company risked a negative press in China for disappointing customers, as a screenshot of Tesla’s refusal circulated on the country’s social media. In a statement, Pinduoduo said:
We are disappointed that Tesla has made it difficult for some of its enthusiasts to get the car of their dreams. We value acceptance as true with the position of our users on our platform and will do our best to protect your rights. We prioritize the interests of our consumers and help them.
Pinduoduo then went to the social media microblog site Weibo, stating: “Tesla rejected the customer’s request that it did not aim to resell the vehicle and had it intended for non-public use. Array. Tesla that refused to deliver an order contract.” . with a consumer.”
One of the buyers is also filing a complaint against Tesla, according to Chinese news agencies.
The explanation for why Tesla was so strict about the sale of Pinduoduo is not so much about express transactions, but that Tesla seeks to explain the road regulations at the beginning of its china vacation. Tesla’s business style is generally a luxury product. Even the Model 3, which costs less than other Teslas or luxury cars, is sometimes more expensive than classic mid- and low-level gasoline sedans.
Therefore, in both the value and the visitor’s transaction experience, the promise of the Tesla logo is for each and every step of the journey. While the Pinduoduo itself may not appear to be such a violation, Tesla is probably looking to identify fundamental regulations early in China, where purchasing products through third-party websites is common, as is piracy and other disorders for large companies. Logos.
Given Chinese habits, this may not be the last time Tesla harasses Chinese consumers in the future.
Interestingly, Chinese web giant Tencent is an investor in Tesla, where it holds a 4% stake, and Pinduoduo, in which it holds a 16.5% stake. It is up to Tencent to act as moderator in this case.
However, whatever the end result of this small fight, investors will have to be prepared for more potholes in The Chinese Tesla on the road, so to speak, as the big American logo clashes with Chinese culture.
China was really the only developing market for Tesla in the last quarter and is of vital importance to the automaker in the future. Since the gigantic Chinese market is so vital to Tesla, and probably something vital in this year’s giant rally in action, Tesla’s quotes with the Chinese government and major Chinese corporations deserve to be monitored.