The thing about doing business in a command economy is you’ve got to stay in good with the commanders, who are sometimes known to be capricious. From Fan Yu at The Epoch Times via zerohedge.com:
o see the impact China’s fickle market can do to a company’s value, look no further than Tesla.
On April 20, the Chinese Communist Party (CCP)’s media and regulators began a series of public rebukes against the California-based electric carmaker. The criticisms were broad, ranging from Tesla’s car safety, to data gathering practices, as well as customer service.
In early June, technology website The Information reported that Tesla’s May China orders fell by nearly half compared to April, according to internal data. Orders fell from 18,000 in April to 9,800 in May, a reflection that Chinese consumers were negatively impacted by the uproar.
And all of this has erased $137 billion in market value as Tesla’s stock price declined 19.5 percent since April 21.
A Series of Unfortunate Events
Tesla has encountered issues all year in China. In February and March, the CCP banned Tesla from its military compounds and housing units on concerns that the company could collect information via the cameras attached to Tesla cars to facilitate spying on behalf of the United States.
In early April, Tesla’s communications and governmental affairs director in China announced that any data collected within China would be stored in China and will not be sent to the United States, in an effort to quell CCP security concerns. This came about after founder and CEO Elon Musk publicly declared that Tesla would not engage in spying.
On April 20, CCP mouthpiece Xinhua published an article from the sidelines of the Shanghai Auto Show slamming the electric vehicle maker on the quality of its vehicles, citing consumer complaints.
On the same day, an official post on WeChat from the account of the powerful Commission for Political and Legal Affairs also drew attention to the Auto Show, when a woman climbed onto the roof of a Tesla vehicle to complain about her car’s faulty brakes. The video of the woman went viral on Chinese social media. While it’s unclear why the CCP organ which oversees the country’s police and court system would weigh in on electric cars, it was nonetheless a powerful rebuke of Tesla.
While Tesla China originally pushed back against this narrative, stating that the woman in question has been protesting against Tesla for some time, later during the same week the company issued a public apology and promised to better listen to customer complaints.
Play stupid games, win stupid prizes. Lolol at Elon.