Tesla has aggressively pursued legal action against critics in China, targeting car owners, bloggers, and media outlets that question the safety and quality of its vehicles. The company has won nearly all its lawsuits, benefiting from strong government backing and China’s pro-business legal environment. Tesla’s legal victories highlight the growing influence of foreign firms in China’s judicial system, where consumers and critics face significant challenges in holding corporations accountable.

Zhang Yazhou’s Case: A Battle Against Tesla

One of Tesla’s most widely publicised legal disputes in China involves Zhang Yazhou, a car owner who became a vocal critic of the company. The case dates back to February 2021, when Zhang’s father was driving their Tesla Model 3 in Henan province and allegedly experienced brake failure, leading to a crash. While local traffic police attributed the incident to speeding and driver error, Zhang insisted that the car’s brakes had malfunctioned. She demanded full access to the crash data, but Tesla refused to provide it in its entirety, further fueling her suspicions.

Zhang’s Protest & Tesla’s Response

In April 2021, frustrated by Tesla’s refusal to disclose complete data, Zhang staged a high-profile protest at the Shanghai Auto Show. She climbed onto the roof of a Tesla car, wearing a T-shirt that read “Tesla brake failure”, and shouted slogans, drawing widespread media attention. The protest went viral on Chinese social media, sparking heated debates about Tesla’s reliability and corporate ethics.

Tesla initially dismissed Zhang’s claims, calling her a paid agitator and accusing her of orchestrating a smear campaign. The company later released partial driving data, which it claimed proved there was no brake failure. However, Zhang continued to insist that the data had been altered and launched a defamation lawsuit against Tesla, arguing that the automaker had damaged her reputation and violated her privacy by publishing personal details about her case.

Tesla’s Counterattack: Legal & Financial Pressure

Tesla countersued Zhang for defamation, arguing that her public accusations were false and harmful to the company’s reputation. The case dragged on for several years, with multiple court hearings. Finally, in May 2024, a court in Henan ruled in Tesla’s favour, ordering Zhang to:

• Pay Tesla US$23,000 (RM102,827) in damages
• Issue a public apology for spreading false claims

The court justified its ruling by stating that Tesla had provided sufficient evidence that the crash resulted from driver error rather than mechanical failure. Zhang, however, has appealed the decision, continuing to frame her legal battle as a fight for consumer rights and corporate accountability.

Tesla’s Legal Successes & Political Influence in China

Tesla’s high success rate in lawsuits has raised questions about the fairness of China’s legal system. Reports indicate that the company has won nearly 90% of civil cases related to quality, safety, and contract disputes, an unusually high figure for an automaker facing significant consumer complaints.

Political Ties & Preferential Treatment

Tesla’s influence in China is closely linked to its strong political backing from Premier Li Qiang, who played a key role in fast-tracking Tesla’s Shanghai Gigafactory when he was party secretary of Shanghai. Under Li’s leadership, Tesla received:

• Fast-tracked regulatory approvals
• Tax incentives
• Exclusive access to China’s automotive market, unlike other foreign automakers

This government support has positioned Tesla as a favoured foreign enterprise, allowing it to expand rapidly while facing minimal regulatory challenges. Critics argue that this political favouritism has extended into China’s legal system, making it harder for consumers and whistleblowers to challenge the company.

The Broader Impact of Tesla’s Legal Strategies in China

Tesla’s aggressive legal approach has had a chilling effect on consumer complaints in China. Many car owners and critics fear the financial burden of lawsuits and the potential for government-aligned courts to rule in Tesla’s favour. Some key consequences include:

• Reduced Public Criticism: Bloggers and media outlets have become more cautious about reporting on Tesla’s vehicle defects or safety concerns, fearing defamation lawsuits.
• Consumer Hesitation to Sue: With Tesla winning the vast majority of cases, many consumers feel discouraged from pursuing legal action, even when they believe they have legitimate grievances.
• Tesla’s Brand Protection: By aggressively suing critics, Tesla has managed to maintain its image and prevent major reputational damage in China, a critical market for its global operations.

Despite these challenges, Zhang Yazhou’s case remains a symbol of consumer resistance in China. Her legal battle has sparked debates about corporate accountability, transparency in vehicle safety data, and the power dynamics between foreign companies and Chinese consumers. As she continues to fight her case on appeal, it remains to be seen whether her efforts will lead to greater transparency in China’s legal and automotive industries or if Tesla’s dominance will remain unchallenged.