Elon Musk's Tesla Recalls Nearly 128,000 Cars in China Due to Rear Motor Inverter Defect

Tesla has recalled nearly 128,000 cars in China due to a fault that could "increase the risk of vehicle collision", the country's state market regulator said.

It is the latest hitch for the US electric vehicle giant that is hugely popular in China, but has also faced complaints from consumers and been hit by COVID-19 lockdowns.

About 127,785 domestic and imported Tesla Model 3 cars were recalled due to a rear motor inverter defect discovered after regulators launched a probe, according to a Thursday notice.

"When this fault occurs when the car is driving, it will cause the vehicle to lose its driving motion," the State Administration of Market Regulation said.

"In extreme cases, this could increase the risk of vehicle collision."

Tesla sold a record 70,847 cars in China in December, facing stiff competition from homegrown brands such as Nio and XPeng.

But the carmaker has also been targeted by numerous social media complaints from Chinese users about quality and service issues, culminating in a high-profile customer protest at the Shanghai Auto Show in April last year.

Tesla's Shanghai "gigafactory" has been shut for at least 12 days due to a spiralling outbreak that has seen record infection numbers and confined the city's 25 million residents at home indefinitely, according to Bloomberg.

In December Tesla recalled almost 200,000 vehicles from China over a trunk defect that increased the risk of collisions.

As the world's biggest polluter, China has heavily encouraged sales of electric and hybrid vehicles through subsidies, aiming to have a majority of cars powered with clean energy by 2035.

Tesla founder Elon Musk last year predicted that China would become the firm's biggest market in the long term, and has sought to increase its foothold in the country as the world's biggest consumer of electric vehicles.