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Tesla Model 3 cars underperformed customers’ expectations. According to buyers, the hardware in Model 3 vehicles was the 2.5 version as opposed to the 3.0 version the company promised. Tesla (TSLA) stock was up on Wednesday.
Tesla Inc (NASDAQ: TSLA) stock is like a balance-wheel. A couple of weeks ago, shares were beating their own records several times. Then, as coronavirus was gathering speed and scale, TSLA stock plunged. Now, Tesla (TSLA) stock rises again.
On Wednesday, Tesla shares ended the day at $749.50, or 0.54% up in comparison with the day before. During the trading session, the highest mark was $766.52, the lowest point made up $724.73. The company’s market cap is $137.99 billion. However, in the premarket, it is 4.34% down and is trading at around $717.
Tesla (TSLA) Stock Rises Despite Complaints from Customers in China
Notably, Tesla stock is up despite an unfortunate incident that has taken place in China. Last week, the car manufacturer started the delivery of its new Model 3 electric vehicles from the Shanghai factory. But the cars turned out to underperform customers’ expectations. According to buyers, the hardware in Model 3 vehicles was the 2.5 version as opposed to the 3.0 version the company promised.
With the new version of the hardware, the vehicle would have new control chips. The new chips are 21 times faster than the older ones in processing graphics. Besides, Model 3 offers dual-motor all-wheel drive, 20” Performance Wheels and Brakes, and lowered suspension for total control, in all weather conditions. Further, the vehicle has two independent motors. The car can drive on either motor and if one motor stops working, you can safely continue to your destination with the second.
In addition, Model 3 is fully electric. If you charge overnight at home, you can have a full battery every morning. According to Tesla, it is easy to plug in along the way, at any public station or with the Tesla charging network.
As the cars received by the Chinese customers actually included version 2.5 of the hardware, buyers are dissatisfied. They have even threatened to take the carmaker to court.
One customer said:
“Tesla used whatever components that were available to make a quick profit. It’s disgusting.”
Another user commented:
“What if we did not find out? Tesla, you have failed to live up to the expectation of Chinese people and government.”
Tesla’s Response to Complaints
When reached for the comment, Tesla tried to justify itself. As the company has explained, the downgrading of the chip resulted from the supply issues caused by the coronavirus outbreak. Tesla has promised to provide free upgrades from the old chips when the production capacity recovers.
The company said:
“We are deeply sorry for the confusions we have caused to some Tesla owners.”
Elon Musk has also commented on the incident. He took to Twitter to make some remarks, however, his statement caused even more confusion.
True. Oddly, those who complained didn’t actually order FSD. Perhaps they weren’t aware that the computer is upgraded for free if the FSD option is ordered even after delivery.
— Elon Musk (@elonmusk) March 4, 2020
FSD (full self-driving) refers to a premium feature the cost of which is about $8,000 more than a standard Model 3 car.
While the Shanghai factory is going to upgrade the chip for free even if the car does not have FSD, Musk’s post comes short of its promise.
For some customers, the incident is an unforgettable mistake that undermines the company’s reputation. It would also seem to take a toll on the company’s shares. However, contrary to expectations, Tesla (TSLA) stock rises. The growth is not significant, but still worth attention in the situation given. We will monitor the situation on the market and inform about the further consequences of the COVID-19 outbreak.