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Buyers in China Protest Tesla Chip Switch

Virus-related parts shortage riles early Model 3 buyers
#asia #tech #Tesla

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Tesla is blaming the coronavirus outbreak for a firestorm of protest among its customers in China.

Tesla began making Model 3 electric sedans in its new factory in Shanghai two months ago. But early buyers discovered that the semi-autonomous Autopilot system in their cars was controlled by an older-generation computer, not the next-generation chip they expected.

Coronavirus Disrupts Supply

Tesla said nearly a year ago that it would switch from the so-called HW 2.5 chip to the more powerful HW 3.0 chip in April. The new device processes graphics data 21 times faster than the old one, which enhances the Autopilot system’s performance and ability to detect small objects.

Tesla’s new plant in Shanghai  (Image: Tesla)

But earlier this week, the company acknowledged that a supply disruption caused by the coronavirus epidemic in China forced it to temporarily substitute the older chip in its locally built Model 3s.

Tesla has promised it will provide a free upgrade to the new chip as soon as possible. But many early buyers have been incensed by what they describe as the company’s “arrogant” and “insincere” behavior, the Tokyo-based Nikkei business daily reports.

An ad hoc consumer rights group is demanding triple damages because of the secret chip downgrade.

China’s rising consumer rights movement

The Nikkei says there also appears to be confusion about whether Tesla has pledged to install the advanced chip in all China-made Model 3s, or only in those equipped with the $8,000 Autopilot system. One owner claims that Chinese regulations require the more powerful chip in both cases, according to the newspaper.

Analysts predict the tempest will soon blow over, thanks to Tesla’s premium image and vow to take corrective action. But the furious response to the issue is a vivid reminder of China’s rising consumer rights movement. Government regulators have been especially harsh with foreign-based companies.

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