Tesla China recently refused to deliver vehicles to a group of consumers, claiming that their buying channels were abnormal, according to Chinese media reports

A consumer from Wuhan provided a transcript of his chat on Wechat, in which an employee of Tesla China said: 

Sorry, we suspect that this order was placed by pinduoduo or other merchants in your name. In fact, it constitutes concealing the true order information from our company, according to our previous announcement, this is an unauthorized sales activity. You should ask your car buyer for a car or a refund. 

In July 2020, Pinduoduo, China’s emerging e-commerce giant, launched an online promotion for Tesla. Users can buy Tesla Model 3 for 251800 yuan ($36017).  The price is 19750 yuan lower than Tesla’s official price in China. 

Subsequently, Tesla China issued a notice saying that they had not reached a cooperation with Pinduoduo and reserved the right to pursue legal liability. 

The Wuhan consumer provided the media with a receipt showing that he had transferred 270550 yuan to Tesla for car purchases. This means that Pinduoduo discounts are in the form of cash subsidies. 

This is Pinduoduo’s typical strategy. 

In recent years, Pinduoduo, as the fastest growing e-commerce company in China, has been implementing a barbaric discount strategy. Its usual pattern is to obtain genuine goods of a brand through unauthorized distribution channels and then sell them to consumers at a lower price than the market without notifying the original brand. 

In some cases, Pinduoduo’s price to the final consumer is even lower than the purchase price of the brand dealer. 

In this case, Pinduoduo may have transferred 20, 000 yuan in cash directly to consumers and asked consumers to place orders with Tesla. This may violate Tesla’s company policy, but if Tesla refuses to deliver goods to consumers as a result, it may violate Chinese law. 

According to Pinduoduo’s event page, at least nearly 10,000 consumers participated in the promotion.