This article explores Tesla's remarkable success in China, highlighting its use of legal action, political influence, and media control to silence critics, achieve financial gains, and limit accountability. The story focuses on a case where a Tesla owner, Zhang Yazhou, sued for defamation after publicly criticizing the company's brakes. The outcome of the case reflects a broader trend of Tesla's dominance in Chinese courts, where it has won a staggering majority of cases against customers and critics.
In this photo provided by Zhang Yazhou, she sits on the roof of her damaged Tesla Model 3 with a bullhorn outside a Tesla dealership in Zhengzhou, the capital of central China’s Henan province, on March, 9, 2021. Banner reads, “ Tesla brake failure.” (Courtesy Zhang Yazhou via AP) That’s left some Tesla owners desperate. Zhang Yazhou protested publicly that her Model 3’s brakes had failed and caused an accident in 2021 that sent her parents to the hospital.
Tesla said that wasn’t true and sued her for defamation. A Chinese court ordered Zhang to pay the $1.1-trillion company more than $23,000 in damages and publicly apologize for her criticism. “I refuse to accept it,” said Zhang, who appealed the verdict. “As a consumer, even if I said something wrong, I have the right to comment and criticize. I spoke about my feelings as a user of the car. It has nothing to do with damaging their reputation.”., Tesla’s record in China shows how it has thrived in a system where regulators, the courts and media all answer to the ruling Communist Party. It’s not common for automakers – in China or elsewhere -- to sue their own customers. But Tesla has done so successfully in China, where Elon Musk’s company has used the courts and the patronage of a powerful leader to silence critics, reap financial rewards and limit its accountability. Tesla did not return requests for comment. Here are some key things to know about Tesla’s success in China:Tesla’s commercial and political success in China has hinged on the support of a powerful patron: Li Qiang, the former party boss of Shanghai who is now China’s premier, second in rank only to President Xi Jinping. Tesla built its first overseas factory on the outskirts of China’s financial capital under his watch in 2019. With Li’s support, Tesla was the first foreign automaker allowed to retain complete control over its China venture. Tesla got low-interest loans, tax breaks, favorable regulatory changes and other benefits.Musk’s “greater objective was winning influence over the people that mattered for him, that enabled him to get things done,” said Bill Russo, founder of Automobility Ltd., an advisory firm based in Shanghai. “He’s done a good job of it in China, and he’s done it now with the influence he purchased with his relationship with Trump.”Tesla has had an impressive winning streak in Chinese courts Over the last four years, Tesla has sued at least six car owners in China who had sudden vehicle malfunctions, quality complaints or accidents they claimed were caused by mechanical failures. The company has also sued at least six bloggers and two Chinese media outlets that wrote critically about the company, according to a review of public court documents and Chinese media reports by The Associated Press. Tesla won all eleven cases for which AP could determine the verdicts. Two judgments are on appeal. One case was settled out of court. Tesla has not only won the defamation cases it brought against unhappy car owners and critical journalists, it has also prevailed in lawsuits customers have filed against it. An AP review of a Chinese government database of court filings published online found 81 civil judgments in which car owners sued Tesla over safety and quality issues or contract disputes. Car owners won in only nine of those cases. While some industry experts say it’s generally difficult for customers to win such cases, others say it’s remarkable for a foreign company to enjoy such blazing success in Chinese courts. “For Tesla to win that percentage of the time is an anomaly,” said Russo, who also used to be regional head of Chrysler in northeast Asia. “The odds are stacked against you. It’s like going to the casino and winning every hand.” In a statement to AP, the Shanghai High People’s Court said that judgements are the result of a “fair trial.” “It cannot be assumed that the party has received ‘special protection’ or ‘special treatment’ because of their victory,” the court wrote.Two Chinese journalists based in Shanghai told AP there is an unwritten rule to avoid critical coverage of Tesla. Both spoke on condition of anonymity, fearing retaliation. “We were told by our editor that we should not write negatively about Tesla because it is a key company that was introduced and protected by the Shanghai government,” a tech reporter told A
Technology TESLA CHINA ELON MUSK COURT CASES LEGAL ACTION CONSUMER CRITICISM MEDIA CONTROL POLITICAL INFLUENCE BUSINESS SUCCESS
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