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Tesla owners in China protest surprise price cuts they missed

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SHANGHAI, Jan 7 (Reuters) – Hundreds of Tesla (TSLA.O) owners rallied at the automaker’s showrooms and distribution centers in China over the weekend, demanding rebates and credit after sudden price cuts they say meant who paid dearly for the electric cars they bought earlier.

On Saturday, about 200 recent Tesla Model Y and Model 3 buyers gathered at a Tesla delivery center in Shanghai to protest the US automaker’s decision to slash prices for the second time in three months on Friday.

Many said they believed the prices Tesla charged for its cars at the end of last year would not be cut as abruptly or deeply as the automaker announced in a move to spur sales and support production at its Shanghai factory. The scheduled expiration of a government subsidy in late 2022 has also prompted many to finalize their purchases.

Videos posted on social media showed crowds at Tesla stores and delivery centers in other Chinese cities from Chengdu to Shenzhen, suggesting a broader consumer reaction.

After Friday’s surprise discounts, Tesla’s electric vehicle prices in China are now between 13% and 24% below September levels.

Analysts said Tesla’s move was likely to boost sales, which slumped in December, and force other EV makers to cut prices as well at a time of sluggish demand in the world’s biggest market for battery-powered cars.

While established automakers often give discounts to manage inventory and keep factories running when demand falters, Tesla operates without dealerships and transparent pricing is part of its brand image.

“It may be normal business practice, but this is not how a responsible company should behave,” said a Tesla owner who protested at the company’s delivery center in the Shanghai suburb of Minhang on Saturday, and gave his last name as Zhang.

He and the other Tesla owners, who said they took delivery in the later months of 2022, said they were frustrated by Friday’s abrupt price cut and Tesla’s lack of explanation to recent buyers.

Zhang said police facilitated a meeting between Tesla staff and the assembled owners, in which the owners handed over a list of demands, including an apology and compensation or other credits. He added that the Tesla team had agreed to respond by Tuesday.

Around a dozen police officers could be seen at the Shanghai protest and most videos from the other demonstrations also showed a large police presence at Tesla sites.

Protests are not a rare occurrence in China, which over the years has seen people demonstrate in large numbers over issues such as financial or property fraud, but authorities are on high alert following widespread protests in Chinese cities and at major universities in late November against COVID-19 restrictions.

‘RETURN THE MONEY’

Other videos that appear to be of Tesla owners protesting were also posted on Chinese social media platforms on Saturday.

A video, which Reuters verified was filmed at a Tesla store in the southwestern city of Chengdu, showed a crowd chanting: “Give back the money, give back our cars.”

Another, which appeared to have been filmed in Beijing, showed police cars arriving to disperse the crowd outside a Tesla store.

Reuters was unable to verify the content of any of the videos.

Tesla does not plan to compensate buyers who took delivery before the latest price cut, a Tesla China spokesman told Reuters on Saturday.

He did not respond when asked to comment on the protests.

China accounted for about a third of Tesla’s global sales in 2021 and its Shanghai factory, which employs around 20,000 workers, is its most productive and profitable plant.

Analysts are bullish on the potential for Tesla’s price cuts to spur sales growth with a year to go before the announcement of its next new vehicle, the Cybertruck.

“Nowhere else in the world does Tesla face the kind of competitors they have here. [in China]”, said Bill Russo, head of consultancy Automobility Ltd in Shanghai.

“They’re in a much larger EV market with companies that can price more aggressively than they can, until now.”

In 2021, Tesla faced a PR firestorm after a disgruntled customer climbed into a car at the Shanghai Auto Show to protest the company’s handling of his complaints about his car’s brakes.

Tesla responded by apologizing to Chinese consumers for not addressing complaints in a timely manner.

Reporting by Brenda Goh, Zhang Yan and Casey Hall Editing by Kevin Krolicki and Tomasz Janowski

Our Standards: Thomson Reuters Trust Principles.

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