Tesla gets 'black eye' from China regulator over Autopilot glitch

Tesla Inc (NASDAQ:TSLA) has been forced to 'recall' over a quarter of a million cars in China due to a software issue. The US electric car manufacturer was asked by Chinese regulators to implement a software fix on 285,000 vehicle, most of the cars it has delivered in the country from recent years. China's State Administration for Market Regulation said the enforcement was connected to a function with the cars' Autopilot assisted driving function, which can be activated automatically and cause sudden acceleration. Tesla is expected to be able to complete the software fix remotely, in most cases, via an online update to the cars' active cruise control feature.  The State Administration for Market Regulation stated the recall will involve around 211k locally produced Model 3 vehicles and 36k imported cars, along with 38k Model Ys. The issue is "a moment of truth for Tesla" and a "black eye" for Elon Musk, said Wall Street broker Wedbush, with the company having battled negative PR issues around Autopilot in this key region over the last year. Analyst Daniel Ives said: "Let's be clear this is not the news bulls want to see as it adds to the negative PR issues in China, which is poised to represent 40% of global deliveries for Tesla by next year... China demand is a key driver for the long term Tesla growth story and the company must play nice in the sandbox with Beijing around safety issues, otherwise it will be an impediment towards achieving its goals/targets in country. "We believe this situation overall is a bump in the road and does not derail the near-term or long-term bull thesis for Tesla China, however going forward it needs to be a smoother road on autopilot safety otherwise the PR black cloud will continue." Wedbush has a $1,000 price target on the stock.