In this article

Tesla CEO Elon Musk lauded Chinese automakers Friday, calling them the “most competitive in the world,” during a pre-recorded question-and-answer stream at the World New Energy Vehicle Congress, which is hosted in China’s Hainan province.

Musk was highly complementary of the nation that’s imperative to his electric vehicle company, and the comments come as Tesla tries to improve its reputation in China.

“I have a great deal of respect for the many Chinese automakers for driving these (EV) technologies,” Musk said. In the three-minute appearance, Musk said Chinese carmakers are some of the best at software, which he said will “shape the future of the automobile industry.”

Tesla’s electric car maker competitors in China include companies like Nio and Xpeng.

The company broke ground on a major Shanghai factory in 2019 and was seen as a poster child for Beijing’s attempts to show it’s allowing more foreign businesses into its relatively closed market.

However, negative press about Tesla in China has increased over this past year. One high-profile case occurred in April when a woman, who claimed to be a Tesla customer, protested an alleged brake failure in her car at the Shanghai auto show. A video of the incident went viral on Chinese social networks, and state media said Tesla had an “arrogant and overbearing stance” in China.

It’s also faced regulatory scrutiny around its privacy and a handful of recalls in China.

“Tesla is fully aware of the severity of the PR crisis” it faces in China, JL Warren Capital, an equity research firm that focuses on Chinese and U.S. companies with significant exposure in China, wrote earlier this summer. Tesla also reached out to social media influencers in China to try to get them to remove or recant their critical posts, including some by noted automotive experts, according to Bloomberg.

Tesla sold 44,264 China-made vehicles in August, including 31,379 for export. It was an increase from the 32,968 China-made vehicles sold in July and 33,155 units sold in June.

Subscribe to CNBC on YouTube.