Tesla recalls 435,000 cars in China over rear light issue and will issue software update

Tesla plans to recall more than 435,000 cars in China and issue software updates to fix a rear light issue, the Chinese market regulator said Thursday.

A total of 142,277 Model 3 sedans and 292,855 Model Y vehicles could be affected by the issue in which a software defect stops the rear lights on the car from illuminating, according to China’s State Administration for Market Regulation.

The regulators said this poses a safety hazard for drivers.

Last month, Tesla recalled more than 321,000 vehicles in the U.S. over a similar issue.

Tesla will issue software updates remotely to fix the problem.

Technical issues are mounting for Tesla in China. The U.S. electric carmaker announced a recall of more than 80,000 cars in China last week over seatbelt and software issues.

China is one of Tesla’s most important markets. The company has a major production factory in Shanghai and has been selling a record number of China made-cars in recent months.

But Elon Musk’s automaker is also facing tougher competition from domestic rivals including Warren Buffett-backed BYD and startups including XPeng, Nio and Li Auto. And in 2023, electric carmakers are planning to release a slew of new vehicles.

In October, Tesla cut the price of its Model 3 and Model Y vehicles in China after raising them earlier in the year on rising material costs.