The company claimed that every car it produces aligns with national standards
Two Tesla employees recently revealed the company decided to remove one of the two electronic control units (ECUs) on the bogies of China-manufactured Model 3 and Model Y cars to deal with chip shortage and rush to meet delivery targets in the fourth quarter of 2021.
The revelation has sent shock waves throughout the world, potentially dealing a blow to consumer confidence in the world's largest electric carmaker.
Typically, a car is equipped with two ECUs instead of one. They are a key part of the electric power assist steering system that converts the rotational motion of the steering wheel into a force that makes wheels turn.
The two Tesla employees in question, however, claimed that its cars are unsafe, saying that losing one ECU does not pose a safety hazard because the removed part is a "secondary ECU" mainly used to provide backup.
Notably, Tesla chose not to go public with the omission, and it's unclear whether it will make similar cuts to cars made in the US or shipped to the US.
According to Tesla's 10-K annual report filed with the US Securities and Exchange Commission (SEC), its revenue in the Chinese market reached USD 13.84 billion in 2021, a year-on-year increase of 107.8%.
In the fourth quarter of 2021, Tesla generated USD 4.83 billion in China, after a deduction of USD 9.15 billion in revenue for the first three quarters.
Tesla delivered 484,130 cars in China last year, accounting for 51.7% of its global delivery of 936,000, according to China Passenger Car Association.
Ditching chips isn't new for NEV companies in an urge to deliver. Ora, a popular EV brand under Great Wall Motor, drew criticism in December last year after China's state broadcaster said it replaced Qualcomm in-car operating system chips with cheaper alternatives in its models.
The company was accused of false advertising and misleading consumers.
Ora is not alone in lying about the specifications of its products. Over the past two years, a number of auto makers have come under fire for similar scandals.
Geely-controlled Zeekr was found to have lowered the rated quick charging power of its Zeekr 01 model from 800 volts to 400 volts.
Tesla was revealed to use HW2.5 chip in its Model 3 sedan rather than the HW3.0 chip specified in the user manual.
Media reported that complaints about carmakers' omission of components such as chips, radars and batteries are only expected to rise and constitute a stumbling block to the growth of China's NEV industry.