Chinese electric vehicle manufacturers extended losses on Monday after Tesla and eight other automakers announced the largest recall in the country’s history, affecting approximately 4.3 million vehicles due to concerns over electronic door handles that may hinder emergency egress.
Shares of Xiaomi led declines, dropping 4.07% after the company disclosed a recall of part of its SU7 lineup. Li Auto and Xpeng fell 3% and 2.66%, respectively, while NIO declined 1%. BYD, Leapmotor, and Geely each retreated between 1% and 2%. Tesla’s U.S.-listed shares, though not yet trading at the time of the report, were indicated up 5.14% in the ticker summary.
The recalls follow heightened regulatory scrutiny over hidden or electronic door handles, which can complicate operation during emergencies. In February, China announced a ban on such designs effective 2027, becoming the first country to implement such a rule. The U.S. National Highway Traffic Safety Administration flagged the issue in July, noting it could be addressed through a new safety standard applicable to all automakers. European regulators have also raised concerns about the technology.
Automakers are addressing the problem primarily through low-cost measures, including warning labels and over-the-air software updates. The recalls span multiple brands, including Tesla, Xiaomi, Leapmotor, Xpeng, and Geely, and represent some of the largest in their histories. The scale underscores growing regulatory and operational risks for EV manufacturers amid rapid expansion in China’s electric vehicle market.
