Beijing — Zhang Yazhou was in the passenger seat of her Tesla Model 3 when she heard her father’s distressed voice: The brakes are failing! As they approached a red light, her father swerved past two cars, ultimately crashing into an SUV and a sedan before hitting a sturdy concrete barrier.
In shock, Zhang stared at the deflating airbag before her. She could never have foreseen what was next: Tesla sued her for defamation after she publicly voiced her concerns regarding the car’s brakes — and emerged victorious. A Chinese court mandated that Zhang pay over $23,000 in damages and issue a public apology to the $1.1 trillion company.
Zhang is not alone in her confrontation with Tesla, led by Elon Musk, one of the wealthiest individuals globally and a self-professed “free speech absolutist.” Over the past four years, at least six car owners in China have faced lawsuits from Tesla due to vehicle malfunctions, quality grievances, or accidents they attributed to mechanical failures.
The company has also taken legal action against at least six bloggers and two Chinese media outlets that criticized Tesla, as per an analysis by The Associated Press of available court documents and Chinese media reports. Tesla has triumphed in all eleven cases where the AP was able to determine the outcomes. Two judgments, including that of Zhang, are currently under appeal, and one case was settled outside court.
It is uncommon for automakers — either in China or elsewhere — to sue their customers. Nevertheless, Tesla has adopted a bold legal strategy and leveraged the influence of prominent figures in China’s ruling Communist Party to silence critics, secure financial gains, and limit its accountability.
The AP’s examination of Tesla’s operations in China occurs amidst Musk’s growing influence within President Trump’s new administration, spearheading efforts to drastically reduce the federal government’s size and dismiss employees considered disloyal to the president. These actions have raised concerns about Musk potentially undermining the U.S. system of checks and balances, partly to benefit Tesla and his other ventures.
In the United States, Musk has found a powerful ally in Mr. Trump. Together, they have reconfigured federal operations, freezing expenditures, halting programs, and disbanding prosecutors, government watchdogs, and other figures who have historically served as regulatory barriers.
Tesla officials in both China and the United States did not respond to requests for comment.
Tesla’s favorable business landscape in China
Tesla’s trajectory in China illustrates how Musk has flourished in a system where regulators, the media, and the judiciary — all ultimately accountable to the ruling Communist Party — are intricately linked.
Tesla has benefited from the generosity of the Chinese state, obtaining significant regulatory advantages, low-interest loans, and substantial tax incentives. With few exceptions, Tesla has experienced predominantly favorable coverage in the Chinese media, with journalists telling the AP they’ve been directed to avoid reporting negatively on the automaker.
Tesla’s advantages extend to the courtroom — not solely in cases it has brought against customers. An AP review of public court documents revealed that Tesla has won nearly 90% of civil cases concerning safety, quality, or contractual disputes filed by customers.
“The government bestowed Tesla with a super status that left consumers in a precarious situation,” stated Qiao Yudong, a former lawyer for American sports car maker Saleen Automotive in China. “This is why some consumers have resorted to desperate measures.”
The struggles of customers
Zhang was one of those desperate consumers.
The February 2021 collision in central China’s Henan province resulted in her mother and father, who suffered a concussion, being hospitalized for four days, as indicated by medical records. Zhang — who was unhurt in the incident, as was her baby niece — sought to understand what had happened: How could her dream car turn into such a nightmare?
Traffic authorities established that the crash was attributable to her father’s negligence for not maintaining a safe distance. However, Zhang insisted the brakes had failed, causing the car to lose control. She lodged a complaint with a local market regulator, seeking a refund and compensation. Given that Teslas are among the most technologically advanced vehicles available, Zhang requested that the automaker provide complete pre-crash data from her car, hoping it might clarify the situation. Tesla declined.
“Tesla’s representatives were exceedingly arrogant and dismissive with my complaints,” Zhang recounted in an interview. “I was seething with anger.”
After weeks of frustration, she adorned her damaged car with a banner reading “Tesla brake failure” outside the Tesla dealership in Zhengzhou, the capital of Henan province, approximately 124 miles from her residence. She climbed onto the vehicle’s roof and broadcast her protest through a bullhorn: “The Tesla Model 3 brakes have failed,” she declared. “A family of four nearly perished.” The following month, she parked her damaged car outside an auto show in Zhengzhou. Yet, her efforts were futile — Tesla still refused to provide the complete data, and mediation efforts did not lead anywhere.
Believing top Tesla executives would attend an auto show in Shanghai in April, she and a friend — who also had issues with her Tesla — wore matching T-shirts that read “Brakes fail” and approached Tesla’s booth, determined to confront executives. However, Tesla officials evaded them, Zhang asserted, and they were unable to find anyone willing to listen.
As her friend, who was six months pregnant, began shouting, “Tesla brakes fail!” Zhang climbed onto a shiny red display model and began yelling too.
“Things escalated,” Zhang recounted.
That incident, recorded on cell phone videos by witnesses, quickly went viral on Chinese social media. Robust security personnel dragged Zhang away, and she was detained for five days.
Some speculated that Zhang’s protest had been orchestrated — potentially by a competitor or even the Chinese government, aiming to pressure Tesla into adhering to local regulations. Tesla claimed that Zhang had not acted independently; a senior executive suggested in Chinese media that she “had someone backing her” and accused her of raising a ruckus merely to obtain greater compensation.
Zhang maintained that she acted of her own volition — fueled by anguish. Outraged, she proceeded to sue Tesla for defamation, claiming the executive’s comments unjustly portrayed her as a troublemaker, diverting attention from the company’s flaws.
However, she soon found herself facing a lawsuit from Tesla.
Tesla claimed that Zhang had intentionally disseminated false information detrimental to the brand and sought 5 million yuan ($684,000) in damages.
The case, which a court took up in October 2021, unfolded concurrently as Tesla faced a surge of criticism in China.
Tesla’s numerous alleged issues
Numerous Tesla owners had been vocally expressing concerns about purported brake failures, battery fires, unintended acceleration, and other defects, in addition to what they claimed were misleading sales practices. The same month as Zhang’s accident, Chinese regulators summoned Tesla to address quality concerns raised in these reports.
Zhang’s emotional protest sparked a rare wave of criticism against Tesla in Chinese media. Under regulatory pressure, Tesla eventually released the data from her car, which the company claimed indicated her father had been driving nearly 120 kilometers per hour (75 mph) and that the brakes had functioned to mitigate the collision’s severity.
While Tesla finally provided Zhang with the information she sought, they published the data publicly and included her vehicle identification number. She mentioned that she and her family began receiving threats and being doxxed online. Furthermore, she questioned how she could be sure Tesla hadn’t altered or concealed any data from her vehicle. It was a far cry from the victory she had anticipated. Feeling overwhelmed, she filed another lawsuit against Tesla in March 2022, alleging privacy invasion.
Zhang lost both cases she filed against Tesla.
Meanwhile, the defamation case against her continued to progress. Back in court as a defendant, Zhang was unable to prove that the brakes on her Tesla had failed. In a closed trial, a Shanghai court ruled in May 2024 that Zhang’s public complaints exceeded what magistrates deemed reasonable, factual criticism, ordering her to publicly apologize and pay 170,000 RMB ($23,000) to cover damages and the legal expenses of the world’s most valuable car company.
Zhang has appealed the ruling. She asserts that her lawsuit is a call for transparency and accountability, contending that a company as affluent and powerful as Tesla should be capable of tolerating legitimate critiques from its customers.
“I refuse to accept it,” Zhang told the Associated Press. “As a consumer, even if I said something wrong, I retain the right to express my views and provide criticism. I articulated my feelings as a user of the car. It has no bearing on damaging their reputation.”
Challenges for Tesla owners in court
Her chances of succeeding in her appeal against Tesla appear bleak. Tesla has not only triumphed in the defamation cases it pursued against dissatisfied car owners and critical journalists, but it has also succeeded in many lawsuits filed by customers against it.
An AP analysis of a Chinese government database documenting court filings disclosed 81 civil judgments in which car owners litigated against Tesla over safety and quality concerns or contractual disagreements. Car owners triumphed in merely nine of those cases.
In a statement to the AP, the Shanghai High People’s Court asserted that judgments result from a “fair trial” founded on “the objective facts of the case.”
“It cannot be inferred that the winning party has received ‘special protection’ or ‘special treatment’ due to their victory,” the court noted.
While some automotive experts in China suggest it is generally challenging for customers to prevail against car manufacturers, others remark it is extraordinary for a foreign company to achieve such remarkable success in Chinese courts.
“For Tesla to maintain that winning percentage is an anomaly,” stated Bill Russo, founder of Automobility Ltd., a consulting firm based in Shanghai, and former regional head of Chrysler in Northeast Asia. “The odds are against you. It’s akin to going to a casino and winning every hand.”
Tesla and Beijing’s mutually beneficial relationship
Tesla’s commercial and political achievements in China have relied on the backing of a powerful supporter: Li Qiang, the previous party chief of Shanghai who is now China’s premier and second in rank only to President Xi Jinping. It was during his tenure, in 2019, that Tesla established its first overseas factory on the outskirts of Shanghai.
With Li’s backing, Tesla became the first foreign automaker permitted to retain complete control over its Chinese operations, receiving low-interest loans and favorable tax incentives. Moreover, China implemented an emissions credit scheme modeled on a U.S. program that has generated billions in revenue for Tesla.
In January 2020, one year after breaking ground, Elon Musk debuted the first Chinese-manufactured Teslas from a stage in Shanghai. That year, Tesla achieved its first annual profit in its history, leading to Musk being declared the world’s richest person in January 2021.
China, too, obtained its objectives: Tesla has served as a key driver for domestic production and consumption. Prior to Tesla’s entry, new energy vehicles represented around five percent of China’s automotive market. Presently, analysts estimate that more than half of consumer vehicles sold in China are electric. Chinese battery manufacturer CATL, a crucial supplier to Tesla, has integrated itself into global supply chains to become the world’s largest EV battery producer. Meanwhile, China’s BYD has emerged as the world’s largest electric vehicle manufacturer and poses a growing challenge to established automotive brands in the West.
“Tesla played a significant role in that,” remarked Tu Le, managing director of Sino Auto Insights, a consulting firm. He noted how the government facilitated Musk’s factory’s establishment: “It was a swampy area on the outskirts of Shanghai. A year later, they were rolling cars off the assembly line. I’m not sure that occurs anywhere else globally.”
Requests for comments sent to the State Council, which is led by Li Qiang and oversees China’s governmental ministries, went unanswered.
Musk’s substantial influence in China and the U.S.
Musk continues to visit Li during his trips to China. Their meetings highlight the intricacies of Musk’s overlapping agendas as both a businessman and the most China-friendly member of Mr. Trump’s inner circle.
Musk’s “greater goal was to gain favor with influential individuals who mattered to him, thus enabling him to accomplish his objectives,” explained Russo, the automotive strategist in Shanghai. “He has excelled in this regard in China and now with the influence he obtained through his relationship with Trump.”
Safety advocates express concern over the implications of Musk’s proximity to power in the United States. Federal investigations and safety measures that Musk has long opposed could be easily suppressed by the new administration.
In the U.S., Tesla has also faced numerous safety complaints from customers regarding the autopilot feature, battery charging, alleged suspension defects, unexpected braking or acceleration, faulty airbags, and possible monopolistic practices regarding repairs and parts. Judges have dismissed some cases, while in others, Tesla has opted for out-of-court settlements or substantial payouts.
While Tesla hasn’t publicly sued any of its U.S. customers for speaking out, Musk did suggest in January on X that it “may be time” to sue media organizations for coverage that could tarnish Tesla’s image. His post garnered over 22 million views.
Tesla has already successfully pursued such actions in China.
Tesla targets journalists in China
Two journalists in Shanghai informed the AP that there exists an unspoken guideline to evade negative reporting on Tesla. Both spoke on condition of anonymity, fearing repercussions.
“Our editor conveyed that we should refrain from writing unfavorably about Tesla because it is a pivotal company introduced and protected by the Shanghai government,” recounted a tech reporter to the AP.
Those who have deviated from this pattern have found themselves in legal battles. Musk’s company took legal action against media outlets PingWest and ifeng.com due to negative reporting. Tesla was particularly displeased with PingWest’s article that labeled its Shanghai factory a “sweatshop.” The news site ifeng.com faced Tesla’s ire for a piece that examined the challenges faced by car owners contesting the company. PingWest was compelled to apologize and compensate Tesla with 100,000 yuan ($13,700). The outcome of the case against ifeng.com remains unclear.
Tesla is not the only entity in its industry targeting critics; BYD has also been aggressive in litigation against media outlets, including an unsuccessful suit against Vice Media in the United States. Recently, electric vehicle makers Nio and Li Auto have intensified defamation lawsuits against bloggers in China who supposedly spread misinformation about their firms.
However, Tesla is notably unique even among its fierce Chinese competitors for pursuing legal action against car owners who have experienced crashes.
“Tesla utilized their legal clout to intimidate Chinese car owners and those advocating for them,” remarked Feng Shiming, an auto blogger and Tesla owner who was ordered by a Shanghai court last year to pay Tesla 250,000 yuan ($34,200) after he wrote about Tesla’s alleged brake failures. He has since appealed the ruling. “Tesla aims to create a chilling effect within society, instilling fear so that individuals refrain from voicing any negative feedback about the company.”
Chen Junyi understood the message. He lost control of his Model 3, colliding with a dozen cars in a parking lot at high speed in August 2020. He claimed the brakes had failed. At the time, he revealed to Chinese media that he had sustained a broken back and four ribs, requiring the removal of 12 inches of his small intestine. Chen used social media to caution others against purchasing a Tesla, showcasing his long, twisted scar that ran up his abdomen.
Tesla maintained that the accident was due to Chen’s negligence, referencing a technical examination indicating the vehicle accelerated rather than braked in the moments leading up to the crash, and subsequently sued him for spreading falsehoods.
“Tesla ought to respond proactively to consumer concerns instead of using its superior resources to file lawsuits against consumers who are at a disadvantage,” Chen stated in a court declaration reviewed by the AP. “I nearly lost my life due to the car accident. I lost my job and income. I am under immense financial stress.”
Chen opted not to speak with the AP, citing fears of retaliation. A Chinese court mandated Chen to pay the manufacturer 50,000 yuan ($6,800) in compensation — along with a public apology.
“I deeply regret the serious negative impacts I have had on Tesla and its vehicles,” he wrote. “I hereby sincerely apologize to Tesla and to those who were misled by my statements.”
A month later, he retracted his apology, asserting the words were not genuinely his own.
