BEIJING — Zhang Yazhou was sitting within the passenger seat of her Tesla Mannequin 3 when she mentioned she heard her father’s panicked voice: The brakes don’t work!
Approaching a pink gentle, her father swerved round two vehicles earlier than plowing into an SUV and a sedan and crashing into a big concrete barrier.
Surprised, Zhang gazed on the deflating airbag in entrance of her.
She may by no means have imagined what was to come back: Tesla sued her for defamation for complaining publicly concerning the automotive’s brakes — and received.
A Chinese language courtroom ordered Zhang to pay greater than $23,000 in damages and publicly apologize to the $1.1 trillion firm.
Zhang just isn’t the one one to search out herself within the crosshairs of Tesla, which is led by Elon Musk, among the many richest males on this planet and a self-described “ free speech absolutist.”
During the last 4 years, Tesla has sued at the very least six automotive homeowners in China who had sudden automobile malfunctions, high quality complaints or accidents they claimed have been brought on by mechanical failures.
The corporate has additionally sued at the very least six bloggers and two Chinese language media shops that wrote critically concerning the firm, based on a assessment of public courtroom paperwork and Chinese language media experiences by The Related Press.
Tesla received all 11 circumstances for which AP may decide the verdicts. Two judgments, together with Zhang’s, are on enchantment. One case was settled out of courtroom.
It isn’t widespread apply for automakers — in China or elsewhere — to sue their clients.
However Tesla has pioneered an aggressive authorized technique and leveraged the patronage of highly effective leaders in China’s ruling Communist Get together to silence critics, reap monetary rewards and restrict its accountability.
The AP assessment of Tesla’s file in China comes as Musk is wielding vital affect in President Donald Trump’s new administration, main an effort to quickly shrink the scale of the federal authorities and oust workers deemed disloyal to the president.
His actions have raised issues that Musk is weakening the U.S. system of checks and balances, partly, to learn Tesla and his different firms.
In the US, Musk has discovered a strong ally in Trump. Collectively, they’ve launched an assault on the federal authorities, freezing spending, suspending packages and dismissing prosecutors, authorities watchdogs and others which have historically acted as guardrails.
Tesla officers in China and the US didn’t reply to requests for remark.
Tesla’s file in China exhibits how Musk has thrived in a system by which regulators, the media and the courts — which should all in the end reply to the ruling Communist Get together — are, by design, considerably intertwined.
Tesla has profited from the largesse of the Chinese language state, successful unprecedented regulatory advantages, below-market charge loans and enormous tax breaks. With just a few pointed exceptions, Tesla has loved ingratiating protection within the Chinese language press, and journalists informed AP they’ve been instructed to keep away from adverse protection of the automaker.
Tesla’s windfall has prolonged to the courts — and never simply in authorized actions Tesla has introduced in opposition to clients. In a assessment of public courtroom paperwork, AP discovered that Tesla received practically 90% of civil circumstances over security, high quality or contract disputes introduced by clients.
“The government gave Tesla a super status that put consumers in a very vulnerable position,” mentioned Qiao Yudong, a former lawyer for American sports activities automotive firm Saleen Automotive in China. “That’s why some consumers had to resort to extreme actions.”
A type of determined clients was Zhang.
‘Burning with anger’
The February 2021 crash in central China’s Henan province despatched Zhang’s mom and father, who had a concussion, to the hospital for 4 days, medical data present.
Zhang — who was unhurt within the accident, as was her child niece — wished to grasp what had occurred: How may her dream automotive have was such a nightmare?
Visitors police decided that the crash was her dad’s fault as a result of he hadn’t maintained a protected following distance. Zhang, nonetheless, insisted that the brakes had malfunctioned, sending the automotive uncontrolled.
She filed a criticism with a neighborhood market regulator, requesting a refund and compensation.
Teslas are among the many most computerized vehicles in the marketplace, so Zhang requested the automaker to show over the complete pre-crash knowledge from her automotive, hoping it would assist clarify what went flawed.
Tesla refused.
“Tesla’s employees were very arrogant and tough in dealing with my complaints,” Zhang mentioned in an interview. “I was burning with anger.”
After weeks of stewing, she draped her broken automotive with a banner proclaiming “Tesla brake failure” in entrance of the Tesla dealership in Zhengzhou, the capital of Henan province, some 200 km (124 miles) from her dwelling.
She sat on the Tesla’s roof and blared her protest by means of a bullhorn: “Tesla Model 3 brakes failed,” she mentioned. “A family of four almost died.” The following month, she parked her broken automotive outdoors an auto present in Zhengzhou.
It was all to no avail — Tesla refused to show over the complete knowledge and mediation went nowhere.
Figuring that high Tesla officers would attend an April auto present in Shanghai, she and a pal — who had additionally had an issue together with her Tesla — donned matching T-shirts with the phrase “Brakes fail” and headed for Tesla’s sales space, decided to buttonhole executives.
The automaker’s officers averted them, Zhang mentioned, they usually couldn’t get anybody to listen to them out.
Her pal, who was six months pregnant, began shouting, “Tesla brakes fail!”
Zhang clambered on high of a shiny pink show mannequin and began hollering, too.
“Things escalated,” mentioned Zhang.
The second — captured on cellphone movies shot by onlookers — went viral on Chinese language social media. Burly safety guards hauled Zhang out, and she or he was detained for 5 days.
Some observers speculated that Zhang’s protest had been orchestrated — maybe by a competitor or by the Chinese language authorities itself to strain Tesla to evolve with Chinese language laws.
Tesla alleged that Zhang hadn’t acted on her personal.
A high government alleged to Chinese language media that she “had someone behind her” and mentioned Zhang was making a fuss as a result of she simply wished greater compensation.
Zhang insisted she acted on her personal — and out of anguish. Outraged, she sued Tesla for defamation, arguing that the chief’s feedback unjustly forged her as a troublemaker to deflect consideration from the corporate’s personal shortcomings.
After which she discovered herself on the receiving finish of a lawsuit filed by Tesla.
‘The odds are stacked against you’
Tesla mentioned Zhang had intentionally unfold false info that broken the model and requested for five million yuan ($684,000) in damages.
The case, which a courtroom took up in October 2021, got here as Tesla confronted a barrage of criticism in China.
Dozens of Tesla homeowners had been publicly complaining about alleged brake failures, battery fires, unintended acceleration and different defects, in addition to what they claimed have been deceptive gross sales practices.
The identical month as Zhang’s crash, Chinese language regulators summoned Tesla to reply to high quality issues raised by such experiences.
Zhang’s emotional protest sparked a uncommon burst of criticism of Tesla in Chinese language media. Below strain from regulators, Tesla lastly launched the information from her automotive, which the corporate mentioned confirmed her father had been driving practically 120 km per hour (75 mph) and that the brakes had functioned to cut back the magnitude of the collision.
Tesla had lastly given Zhang what she’d been asking for, however they’d printed the information publicly and included her automobile identification quantity.
She mentioned she and her household began getting threatened and doxed on-line.
In addition to, she questioned, how may she be certain Tesla hadn’t modified or redacted the information from her automotive?
It was lower than the victory she’d hoped for. Feeling besieged, she sued Tesla a second time, in March 2022, for invading her privateness.
Zhang misplaced each circumstances she introduced in opposition to Tesla.
In the meantime, the defamation case in opposition to her was grinding alongside.
Again in courtroom as a defendant, Zhang was unable to show that the brakes on her Tesla had certainly failed.
In a closed trial, a Shanghai courtroom dominated in Might 2024 that Zhang’s public complaints went past what magistrates thought-about affordable, factual criticism and ordered her to publicly apologize and pay 170,000 RMB ($23,000) to cowl damages and the authorized prices of the world’s most useful automotive firm.
Zhang appealed the ruling.
She maintains that her lawsuit is a cry for transparency and accountability and that an organization as wealthy and highly effective as Tesla ought to be capable to tolerate legit criticism from its clients.
“I refuse to accept it,” Zhang informed The Related Press, “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.”
Her odds of successful the enchantment in opposition to Tesla don’t look good.
Tesla has not solely received the defamation circumstances it introduced in opposition to sad automotive homeowners and demanding journalists, it’s additionally prevailed in lawsuits clients have filed in opposition to it.
An AP assessment of a Chinese language authorities database of courtroom filings printed on-line discovered 81 civil judgments by which automotive homeowners sued Tesla over security and high quality points or contract disputes.
Automotive homeowners received in solely 9 of these circumstances.
In a press release to AP, the Shanghai Excessive Individuals’s Courtroom mentioned that judgments are the results of a “fair trial” based mostly on “the objective facts of the case.”
“It cannot be assumed that the party has received ‘special protection’ or ‘special treatment’ because of their victory,” the courtroom wrote.
Whereas some auto trade consultants in China say it’s usually troublesome for patrons to win circumstances in opposition to automotive firms, others say it’s exceptional for a international firm to get pleasure from such success in Chinese language courts.
“For Tesla to win that percentage of the time is an anomaly,” mentioned Invoice Russo, founding father of Automobility Ltd., an advisory agency based mostly in Shanghai, who additionally was regional head of Chrysler in northeast Asia. “The odds are stacked against you. It’s like going to the casino and winning every hand.”
The facility of patronage
Tesla’s industrial and political success in China has hinged on the help of a strong patron: Li Qiang, the previous get together boss of Shanghai who’s now China’s premier, second in rank solely to President Xi Jinping.
It was below his watch, in 2019, that Tesla constructed its first abroad manufacturing unit on the outskirts of China’s monetary capital.
With Li’s help, Tesla turned the primary international automaker allowed to retain full management over its China enterprise and bought low-interest loans and beneficiant tax breaks.
China additionally adopted an emissions credit score scheme modeled after a U.S. program that has generated billions in revenue for Tesla.
In January 2020, one yr after breaking floor, Elon Musk unveiled the primary Chinese language-made Teslas on a stage in Shanghai. Tesla turned an annual revenue for the primary time in its historical past that yr, and Musk was declared the world’s richest particular person in January 2021.
China bought what it wished, too: Tesla was a potent catalyst for home manufacturing and consumption.
Earlier than Tesla’s arrival, new vitality autos accounted for round 5% of China’s auto market.
Right now, analysts say, greater than half of passenger autos offered retail in China are powered by an electrical motor. Chinese language battery maker CATL, a key Tesla provider, has embedded itself in international provide chains to change into the world’s largest EV-battery maker.
China’s BYD is now the world’s largest electrical automobile producer and a rising aggressive menace to legacy carmakers within the West.
“Tesla had a large part to play in that,” mentioned Tu Le, the managing director of Sino Auto Insights, a consulting agency. Tu mentioned the way in which the federal government smoothed the way in which for Musk’s manufacturing unit was important. “It was a swampy field on the outskirts of Shanghai. A year later they’re rolling cars off the line,” he mentioned. “I don’t know if that happens anywhere else in the world.”
Requests for remark to the State Council, which is run by Li Qiang and oversees China’s authorities ministries, went unanswered.
Musk nonetheless swings by to satisfy Li when he goes to China. Their encounters underscore the complexity of Musk’s overlapping pursuits as a businessman and probably the most China-friendly member of Trump’s interior circle.
Musk’s “greater objective was winning influence over the people that mattered for him, that enabled him to get things done,” mentioned Russo, the auto strategist 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.”
‘A chilling effect’
Security advocates fear concerning the implications of Musk’s proximity to energy in the US. Federal investigations and security initiatives Musk has lengthy railed in opposition to could possibly be simply snuffed out by the brand new administration.
Within the U.S., Tesla additionally has been topic to a raft of buyer security complaints and lawsuits over autopilot operate, battery charging, alleged suspension defects, sudden braking or acceleration, defective airbags and allegedly monopolistic practices on repairs and elements.
Judges have dismissed some circumstances. In others, Tesla settled out of courtroom or paid hefty settlements.
Tesla has not publicly sued any of its U.S. clients for talking out, although in January, Musk mentioned on X that “maybe it is time” to sue media shops for protection that would stain Tesla’s model.
His publish has been considered greater than 22 million occasions.
Tesla has already efficiently accomplished that in China.
Two Chinese language journalists based mostly in Shanghai informed AP there may be an unwritten rule to keep away from important protection of Tesla. Each spoke on situation 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 informed AP.
Those that have strayed have discovered themselves in courtroom. Musk’s firm sued media shops PingWest and ifeng.com over adverse protection.
It was sad about PingWest’s report that claimed Tesla’s Shanghai manufacturing unit was a “sweatshop.” The information web site ifeng.com drew Tesla’s ire over a narrative that explored the tribulations of automotive homeowners who fought Tesla. PingWest needed to apologize and pay Tesla 100,000 yuan ($13,700). AP couldn’t decide the end result of the case in opposition to ifeng.com.
Tesla just isn’t the one firm in its trade to sue its critics. BYD has additionally aggressively pursued media in courtroom, together with an unsuccessful lawsuit in opposition to Vice Media in the US.
Extra just lately, electrical automobile makers Nio and Li Auto have stepped up defamation circumstances in opposition to bloggers in China who allegedly unfold false details about their firms.
Tesla, nonetheless, stands out even amongst its cut-throat Chinese language opponents — in going after automotive homeowners who suffered crashes.
“Tesla used their legal advantages to bully Chinese car owners and people who speak up for them,” mentioned Feng Shiming, an auto blogger and Tesla proprietor who was ordered by a Shanghai courtroom final yr to pay Tesla 250,000 yuan ($34,200) after he wrote about Tesla’s alleged brake failures. He has appealed the decision. “Tesla wants to have a chilling effect on society and terrify people so they will be scared to say anything negative about Tesla.”
Chen Junyi bought the message.
He misplaced management of his Mannequin 3 and plowed right into a dozen vehicles in a car parking zone at excessive pace in August 2020. He claimed the brakes had failed.
He informed Chinese language media on the time that he broke his again and 4 ribs and needed to have 30 centimeters (12 inches) of his small gut eliminated.
Chen took to social media and warned folks to not purchase Teslas, elevating his shirt to disclose the lengthy, gnarled scar that runs up his stomach.
Tesla maintained the accident was Chen’s fault, citing a technical assessment that discovered the automotive was accelerating and never braking within the seconds earlier than the crash, and sued him for making false claims.
“Tesla should proactively respond to consumers instead of using its superior resources and filing lawsuits against consumers who are at a disadvantage,” Chen mentioned in a courtroom assertion reviewed by AP. “I almost lost my life because of the car accident. I lost my job and income. I am under tremendous economic pressure.”
Chen declined to talk with the AP, citing worry of retaliation.
A Chinese language courtroom ordered Chen to pay the carmaker 50,000 yuan ($6,800) as compensation — and to subject an apology.
“I deeply regret the serious negative impacts I have had on Tesla and its cars,” he wrote. “I hereby sincerely apologize to Tesla and to the people who were misled by my remarks.”
A month later, he took to social media and apologized for his apology, saying the phrases weren’t his personal.
