Tesla Is Suing Its Critics In China

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by Tyler Durden
Thursday, Dec 16, 2021 - 11:58 AM

It looks as though Tesla is leaning on China's judicial system to try and hamper complaints about its brand and bad press in the country. 

Tesla has filed "defamation claims against at least two Chinese citizens who raised concerns about the safety and quality of its vehicles," according to a new report by Bloomberg

The company is claiming that the customers "groundlessly damaged its reputation" and is asking for "steep compensation" as a result. The company's lawyers are also reportedly threatening social media personalities who have been critical of the brand, the report says. Tesla's legal team has been demanding public apologies and retractions of posts to avoid litigation. 

The report suggests that the legal threats are "part of a wide-ranging effort" to try and win back a positive image in China, though we're not sure this is the way to do it. 

It's a risky maneuver, especially because Western brands can sometimes be held in a dark light for perceived aggressive behavior towards local customers. 

Mark Tanner, managing director of China Skinny, a marketing and branding consulting firm in Shanghai, told Bloomberg: “The virality feels more extreme in China than in the West, particularly with foreign brands."

He thinks the strategy will pan out, and said that Tesla “already took a hit from those they’ve taken to court, and although they could suffer in the short term, I expect they believe setting the record straight will have a net-positive impact."

Model S owner Han Chao is among those being sued. He has claimed since 2019 that Tesla "committed fraud by selling him a used car that he later learned had undergone a major repair". He has referred to Tesla as a "hooligan company" on his Weibo account. 

Tesla then sued, and is seeking 5 million yuan ($785,000) in compensation for “unverified, ungrounded, and defamatory remarks.”

Another Tesla critic, Zhang Yazhou, who rose to prominence for jumping on top of a Model 3 sedan at this year's Shanghai Auto Show, is also being sued for 5 million yuan. 

The company is also threatening online influencers, the report says. 

Zhang Xiaoling, a partner at Haodong Law Firm in Beijing, concluded: “Tesla is using litigation to dampen the confidence of individual consumers in safeguarding their rights and, therefore, to forestall actions from other customers.”

Tesla's nearly unlimited resources make for “uncertainties and risks for consumers in the litigation,” he said.