Tesla, under Elon Musk's leadership, has employed an aggressive legal strategy in China, successfully suing disgruntled car owners and critical journalists for defamation. The company has also won a majority of civil cases brought against it by customers, demonstrating its dominance in the Chinese legal system. This strategy, coupled with favorable treatment from the Chinese government, has allowed Tesla to silence dissent and reap significant financial rewards.
Tesla has not only won defamation cases it brought against unhappy car owners and critical journalists in China, but it’s also prevailed in lawsuits customers have filed against it. One such case involved Zhang, a Tesla Model 3 owner in Henan province, who alleged that her car's brakes failed, leading to a multi-car accident. After the accident, Zhang publicly complained about the car's brakes, claiming they had malfunctioned.
Tesla, however, sued Zhang for defamation for making these public statements. In a surprising turn of events, Tesla won the case. Zhang's experience is not unique. Over the past four years, Tesla has sued at least six car owners in China who have experienced sudden vehicle malfunctions, quality complaints, or accidents they believe were caused by mechanical failures. The company has also taken legal action against at least six bloggers and two Chinese media outlets that have written critically about Tesla, according to a review of public court documents and Chinese media reports by The Associated Press. Tesla has won all 11 cases for which AP could determine the verdicts. Two judgments, including Zhang's, are on appeal. One case was settled out of court.This aggressive legal strategy employed by Tesla in China is not typical among automakers. However, Tesla has leveraged its close ties with powerful figures in China's ruling Communist Party to silence critics, reap financial rewards, and limit its accountability. Tesla has benefited from the Chinese government's support, receiving unique regulatory advantages, below-market loans, and significant tax breaks. The Chinese press has generally provided favorable coverage of Tesla, and journalists have reported being instructed to avoid negative reporting on the automaker. Tesla's success in Chinese courts extends beyond the cases it has initiated against customers. In a review of public court documents, AP found that Tesla won nearly 90% of civil cases involving safety, quality, or contract disputes brought by customers
Technology TESLA CHINA LEGAL STRATEGY DEFAMATION CRITICS AUTOMOBILE INDUSTRY ELON MUSK GOVERNMENT RELATIONS CONSUMER RIGHTS
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