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A Tesla Motors Model S electric sedan on charge outside a hotel in Tokyo, Japan. Photo: Bloomberg

Chinese Tesla owners complain of insurance hassle and long delays for repairs

Tesla

Tesla Motors’ electric vehicles might be the hot new thing for China’s nouveau riche, but owners are complaining of long delays waiting for repairs and processing insurance claims.

According to Chinese financial news site , after damaging his Model S one Beijing owner has waited for more than two months while Tesla negotiates with his insurance company.

Under Chinese insurance law, policyholders are usually covered for the cost of repairs. However, when it comes to serious damage, Tesla insists that certain components, namely the battery pack and motor, be replaced in order to protect their company secrets.

This can mean that insurers more used to covering conventional vehicles may refuse to pay.

Owners are also reportedly facing problems when it comes to more general repairs. While the company has a fully equipped service centre in Beijing’s Yizhuang area, parts often need to be shipped from the US, leading to delays and shortages, an issue often faced by low-import vehicles, according to a Beijing-based analyst.

“Tesla customers enjoy the same level and quality of professional service  wherever they are located, as Tesla places customer experience at the core of our business," Tesla spokeswoman Peggy Yang told the South China Morning Post. "The reported incident is an isolated incident in that the customer’s vehicle suffered from severe collision and the recommended repair was to replace the body shell, which needed to be shipped from US, hence the transportation time."

"To ensure the best experience and convenience to our customers, Tesla provides a loaner vehicle or taxi expenses  reimbursement for customers whose cars are in service," she added. "Tesla’s warranty policy also includes 8-year unlimited mileage warranty  for the battery pack and drive unit (for 85kWh vehicles) to best service our customers."

Wu Bixuan, Tesla’s global vice-president, said the company was aiming to expand its service network in China, something it views as its “most crucial task” in the country. In the US, where service centres are far more prevalent and parts more easily sourced, Tesla owners can often get same-day repairs.

China is a key market for the electric car manufacturer, which began direct sales in the country in April. CEO Elon Musk said Tesla aims to sell around 5,000 Model S units in China this year and the company signed a deal in August with China Unicom to build 400 charging stations in 120 cities.

“I think [China is] really important. I think it could be as big as the US market – maybe bigger,” Musk said recently.

Last month, the company settled a long-running trademark dispute with a Chinese company that had threatened to complicate its expansion into the world’s largest car market.
Tesla was one of the fastest growing companies in Silicon Valley last year, with sales growing 387 per cent to more than US$2 billion in 2013. Though growth was strong in the first half of 2014, there has been scepticism over whether the company can meet its ambitious goals. Shares in Tesla fell to their lowest level in six weeks on Monday after JP Morgan Chase projected there would be 303,500 cars assembled in 2020, far below the company’s target of 500,000 vehicles per year.
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