Tesla is recalling more than 1.6 million electric vehicles in China, the country’s market regulator said Friday, marking another blow for the US firm days after it was surpassed in EV sales by China’s BYD.

The recall -- sparked by the discovery of problems with assisted driving functions and door-locking systems -- will be conducted through remote over-the-air (OTA) updates to the cars’ software.

China is a vital component in Tesla’s global layout, both as a large consumer market and the host of a major manufacturing plant in Shanghai.

“Starting from now, a total of 1,610,105 imported Model S, Model X, and Model 3, and domestic Model 3 and Model Y electric vehicles with production dates between August 26, 2014 and December 20, 2023 will be recalled,” the State Administration for Market Regulation (SAMR) said in an online statement.

“For vehicles within the scope of this recall, when the automatic assisted steering function is turned on, the driver may misuse the level two combined assisted driving function, increasing the risk of vehicle collision and posing a safety hazard,” said the SAMR.

The recall also includes 7,538 imported Tesla models made between October 26, 2022 and November 16, 2023, which were found to have “a problem with the door unlock logic controls”.

In 2022, the firm recalled nearly 128,000 cars in China due to a rear motor inverter defect.

And last month, Tesla initiated a recall of over two million vehicles in the United States and Canada due to risks associated with the autopilot software.

The latest recall in China comes just days after local competitor BYD surpassed Tesla to become the world’s leading deliverer of electric vehicles, according to fourth-quarter sales data.

Tesla’s Shanghai production facility -- its first “gigafactory” to be built abroad -- delivered 947,000 vehicles in 2023, Chinese state-run news agency Xinhua reported earlier this week.

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

During a trip to China last spring, Tesla boss Elon Musk praised the country’s “vitality and promise”.

He said that he “was willing to continue deepening mutually beneficial cooperation”, according to a readout provided by Beijing.

Meanwhile, a labour dispute between Tesla and Swedish trade union IF Metall has drawn in a host of unions across the Nordic region, all urging the automaker to sign a collective bargaining agreement.

About 130 workers affiliated with IF Metall began a strike on Oct. 27, sparking sympathy strikes - a solidarity tactic by unaffected workers - from dockworkers, cleaners and car dealerships.

Sympathy strikes are generally legal in the Nordic countries, in a stark contrast to the US where such actions are largely prohibited.

In the 1990s, American toy company Toys “R” Us signed a collective agreement with its 130 Swedish employees after a three-month strike that was also accompanied by sympathy strikes and blockades.

Below is an overview of sympathy actions that are adding pressure to Tesla by potentially disrupting its supply chain in Sweden, where Tesla’s Model Y was the top-selling car in 2023 with 16,412 new vehicles registered:

SWEDEN

Sweden’s transport workers’ union pledged in November to block loading and unloading of Tesla cars across the country’s ports. A dockworkers’ union also said it would not handle Tesla cars in Swedish harbours from Nov. 17.

Seko, which represents service and communications workers, on Nov. 20 started a blockade of delivery and collection of mail and parcels at Tesla’s Swedish workplaces by logistics firms PostNord and CityMail, cutting the EV maker’s access to license plates from the country’s transport authority.

The union of civil servants said its members at PostNord, owned by the Swedish and Danish states, would pause deliveries to Tesla from Nov. 21.

The electricians’ union vowed in November to block electrical repair works at Tesla facilities and charging stations, and a painters’ union warned it planned to stop painting Tesla cars.

The building maintenance workers’ union halted all work related to the automaker from Nov. 17, while a building workers’ union pledged to halt maintenance and construction work at Tesla service workshops.

The transport workers’ union stopped collecting waste at Tesla’s workshops in Sweden from Dec. 29.

Swedish municipal workers’ union Kommunal also stopped waste collection from Tesla’s facilities in Mölndal and Örebro from Jan. 2, as announced on Dec. 14. It also plans to block waste collection from being performed by other service providers.

Unionised workers at Hydro Extrusions, a subsidiary of Norwegian aluminium and energy company Hydro, stopped work on Tesla car products from Nov. 24. The workers are members of IF Metall.

Sweden’s musicians’ union said on Nov. 14 it would block some music from Tesla cars’ media systems.

Some Swedish pension funds have urged Tesla to sign the agreement with the union, but so far held off selling shares.

Norway’s largest private sector labour union said on Dec. 6 it would start blocking transit shipments of Tesla cars meant for the Swedish market from Dec. 20 unless the automaker reached an agreement with IF Metall.

The union said it intended to send a “clear signal to Tesla” and do what was necessary to ensure that any vehicle shipments via Norway to Sweden were blocked, but declined to say exactly what measures it might take.

Danish dockworkers’ union said on Dec. 5 it would not unload or transport cars made by Tesla for Swedish customers.

PensionDanmark, one of Denmark’s largest pension funds, said on Dec. 6 it had decided to sell its holdings in Tesla over the automaker’s refusal to enter into agreements with labour unions.

Finnish transport workers’ union said on Dec. 7 its dockers would not load Tesla vehicles and components destined to Sweden in all Finnish ports from Dec. 20.

Agencies