Tesla blames misprinted label for China customs hiccup

A Tesla Model 3 sedan is displayed during its launch in Hawthorne

On Tuesday, Tesla's shares fell more than 5 percent in early trade after Chinese media reported Shanghai customs had suspended clearance for a batch of Tesla's cars.

At present, Tesla has established its charging network covering more than 170 cities in the country and has built more than 1,300 fast-charging supercharging stations in total.

It said the Model 3 cars were stopped because they did not have Chinese language-warning signs and had missing or incorrect nameplate labels.

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The electric vehicle (EV) maker is now working with the Chinese government to find a solution to the customs clearance procedures and the issues with labeling, Caixin reported. As it seeks to compensate for softening demand in the United States. Daniel Ives an analyst from Wedbush Securities said that "Selling into China has clear hurdles and this is a reminder of the pitfalls when betting on growth in the region".

Tesla made a recording of a conference call with reporters available on its website Wednesday after CEO Elon Musk said the automaker's handling of the call "was a mistake".

Financial publication Caixin had first reported about China's customs authorities blocking the cars. The electric auto will be put on a disadvantage as it will be taking against the government subsidized, locally-made electric vehicles.

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Tesla Inc said on Tuesday that China's customs authorities have accepted the electric carmaker's plan to resolve problems with the clearance of its Model 3 sedans that centered around misprinting of labels. The first shipment arrived in Shanghai on February 22 and the deliveries started at the end of the month as per news in China, according to Reuters.

Musk corrected the tweet within hours to say Tesla would make about 400,000 cars and would be making cars at a 500,000 annual pace by the end of the year, which was in line with the company's guidance. The company will only accept online and phone orders for the cars.

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