China-based electric vehicle battery supplier Contemporary Amperex Technology Co Ltd has denied rumors that claim it has forced employees to buy defective Tesla Inc TSLA vehicles, as per Global Times report on Sunday.
What Happened: CATL, a supplier to both Tesla and its electric vehicle rival Nio Inc NIO, said it has for the past three years encouraged employees to buy emissions-free EVs at a discounted price, subsidized by the company and will continue to do so, as per the report.
An online post by a worker claimed CATL has instructed employees to buy defective Tesla vehicles at a discount to reduce the electric vehicle maker’s inventory.
See Also: Tesla, Nio Supplier CATL Said To Be Planning A New EV Battery Plant In Shanghai
Why It Matters: Tesla had earlier this year run into rough weather in China, a market that contributes nearly 30% of the electric vehicle maker's global sales and is its second-largest market after the United States.
A report by The Information earlier this month said Tesla’s vehicle orders in China nearly halved in May from April, against the backdrop of increased government scrutiny on the U.S. electric carmaker.
In April, the EV maker became a media and regulatory target after a customer at the Shanghai auto show protested an alleged malfunctioning of brakes, the videos of which became viral.
Price Action: Tesla shares closed 1.09% higher at $623.33 on Friday.
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