- The Tesla cars purchased by these companies failed to meet subsidy requirements because they did not drive over 20,000 km within two years.
- Tesla is suing them to recover subsidy payments ranging from RMB 7,000 to RMB 15,000.
Tesla (NASDAQ: TSLA) has filed lawsuits in China against multiple companies that purchased its vehicles, demanding the return of electric vehicle (EV) purchase subsidies because they failed to meet the minimum requirements for receiving the subsidies.
The matter initially drew widespread attention when the American EV maker sued Hangzhou-based Joy Media, demanding the return of a RMB 7,761 ($1,090) EV subsidy.
Joy Media purchased a Tesla vehicle under its corporate name in 2022. Tesla advanced the RMB 7,761 EV subsidy at the time, requiring the vehicle to achieve 20,000 kilometers of driving within two years, local media outlet Jiupai News reported yesterday.
The vehicle failed to meet this mileage requirement, preventing Tesla from receiving the national subsidy, which is why it demanded the RMB 7,761 be returned, Joy Media said.
Tesla did not communicate with the company but proceeded directly to litigation, Joy Media noted. "We will settle with the other party and refund the amount."
Tesla customer support said on Weibo on November 20 that the company had sent payment reminder emails to the email address provided by Joy Media in the purchase agreement on three occasions: July 9, July 29, and September 4, 2024.
It also repeatedly called the phone number provided by the company to attempt contact, but the recipient was either on another call or hung up immediately upon learning the purpose of the call.
After the calls were disconnected, Tesla sent text messages explaining the purpose of the calls. Ultimately, after unsuccessful attempts to reach them, Tesla initiated legal proceedings. The matter has now been successfully resolved through court mediation, the company said.
Over the past four months, Tesla has sued more than 30 companies over contractual disputes, Jiupai News observed.
Defendants from Shenzhen, Jiaxing, and Shanghai interviewed by Jiupai News said they were sued by Tesla to return RMB 7,000 to RMB 15,000 in subsidies because their vehicles failed to meet national mileage requirements two years after purchase.
This isn't Tesla's first demand for EV subsidy refunds. As early as June 2022, reports emerged that some owners received notices from Tesla requesting additional payments because their vehicles failed to meet the mileage requirements stipulated by China's subsidy policy within the specified timeframe.
China has provided policies including purchase subsidies and purchase tax reductions to stimulate the EV industry over the past few years.
The vehicle purchase subsidy expired at the end of 2022 and was not renewed. The purchase tax reduction incentive remains in effect but will be scaled back starting next year.
Under the purchase subsidy program, automakers must initially cover the subsidy amount themselves and subsequently apply to the government for reimbursement for eligible vehicles.
It is worth noting that the requirement for a cumulative mileage of 20,000 kilometers within two years applies only to corporate customers, not individual buyers.
This article was originally published on November 19 and updated on November 20 to include Tesla customer support's response.
($1 = RMB 7.1097)
