Tesla said Wednesday it was working to resume imports of its new Model 3 sedan in China after the company said a labelling hiccup caused problems with customs.

Elon Musk's electric car firm denied the issue would impact sales of the vehicle in China, a key market for the automaker as it faces a battle to control costs and maintain profitability.

"This error resulted from misprinted labels on certain Model 3 vehicles," a Tesla spokesperson said in a statement.

"We have already reached a resolution with Chinese customs, and we are working closely with them to resume clearance procedures on these vehicles," the spokesperson said.

Local business weekly Caixin reported Tuesday that China's customs administration had suspended imports of its Model 3 cars and was holding more than 1,600 of the vehicles -- briefly sending Tesla's stock tumbling in the US.

Musk is betting on China's growing market for electric cars as regulators push the industry towards an all-electric future.

Musk was in China in January for the ground-breaking of Tesla's first overseas factory, which will allow it to sell directly in the world's largest market for electric vehicles.

The new plant will eventually have an annual production capacity of 500,000 vehicles, the California-based company has said, dramatically increasing its output.

Musk said the company planned to finish the "lightning" fast construction of the Shanghai factory by the end of the year and start production.

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Tesla sets March 14 'Model Y' unveiling
Washington (AFP) March 4, 2019
Tesla is planning to unveil a new electric "crossover" vehicle March 14 which is slightly bigger and more expensive than its most affordable model, according to chief executive Elon Musk. Musk tweeted on Sunday that the "Model Y," which had been discussed for several months, would be unveiled at the company's design studio in Los Angeles. The news comes shortly after Tesla unveiled its lowest-priced Model 3, an electric car designed for the masses, at a base price of $35,000, with deliveries pro ... read more