CATL, a large battery manufacturer based in China and one of Tesla’s suppliers, had to officially dispel a rumor that was spreading in China about Tesla offloading defective electric cars at a discount to CATL’s employees.

Tesla has been under attack in Chinese media over the last few months over a slew of different issues – some more serious than others, and some more true than others.

One of those concerns was a rumor that started from the fact that CATL employees were offered discounted Tesla vehicles.

Tesla famously doesn’t discount vehicles, which raised some questions.

Some people on social media claiming to be CATL employees started to spread the rumor that the vehicles were being discounted because they were defective.

The rumor gathered enough steam that CATL actually had to intervene and comment on the situation.

Tesla detractors started to allege that the automaker was using CATL to help sales and reduce inventory in the country as sales decline.

China’s Global Times, which is government-backed, reported this weekend that the company denied the claim:

China’s major electric vehicle (EV) battery manufacturer Contemporary Amperex Technology Co Ltd (CATL), also the battery supplier of Tesla China, denied online rumors claiming it has forced its employees to buy defective Tesla vehicles, CATL told Global Times on Sunday.

As it turns out, Tesla wasn’t the one discounting the vehicles. That was CATL’s doing as part of a program to help its employees switch to electric vehicles.

The discounts were also offered for other electric vehicles, but Tesla was popular in the program as it’s the best-selling non-compact electric vehicle in the country.

According to the China Passenger Car Association (CPCA), Tesla delivered 21,936 vehicles in the country in May.

However, another report claims that Tesla’s net new orders were slashed in half during the same period, which some claim is due to increased negativity about Tesla in the media in China.

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