How Elon musk’s Tesla sued a woman and won $23,000 despite her parents’ hospitalisation over brake failure | Company Business News

A Chinese woman was sued by Tesla, and ordered to pay over $23,000 in damages to the trillion dollar company, after she publicised the alleged brake failure of her Tesla Model 3 that led to a car crash and injured her parents, as per an AP report.

Zhang Yazhou said the brakes of her Tesla Model 3 failed at a red light causing the vehicle to ram into an SUV and a sedan, before crashing into a large concrete barrier, according to the report. The trauma of the accident and injuries to her parents aside, what happened next left Zhang stunned. She was sued by Tesla for defamation, and the company won, with the court ordering Zhang to pay more than $23,000 in damages to the Elon Musk-led auto giant.

What Happened: The Crash, Complaint, Protest and Court Cases

Zhang’s car crash happened in February 2021 in central China’s Henan province. Both her parents suffered concussions and stayed in the hospital for treatment for four days, AP reported citing medical records. Zhang and her baby niece were unharmed.

The report noted that traffic police determined the crash was her father’s fault for not maintaining a safe distance between vehicles, but Zhang alleged that the brakes failed and caused the loss of control. She approached the local regulator for compensation and refund and asked Tesla to provide the pre-crash data rom her car to substantiate her claim. But the company refused.

Zhang said they were “arrogant” and “I was burning with anger” which led to her installing a banner stating: ‘Tesla brake failure’, over her damaged vehicle and parking it in front of the Tesla dealership in Zhengzhou. She also sat on the roof and shouted: “Tesla Model 3 brakes failed” and “A family of four almost died.” She did the same in front of an auto show in Zhengzhou.

But there was no resolution from Tesla. A desperate Zhang made her way to an auto show in April and tried to talk to officials at the Tesla booth — who avoided her. She and her friend (six months pregnant) began shouting “Tesla brakes fail!” and she climbed atop a display model, which caused an escalation.

The impromptu protest was caught on camera and made its way across social media in viral glory showing Zhand being dragged out by five security guards. She was detained for five days.

Tesla alleged behind-the-scenes maneovers from competitors and alleged that “someone” was behind Zhang. The automaker alleged she deliberately spread false information and demanded 5 million yuan ($684,000) in damages.

What Has Happened in Court?

Zhang sued Tesla in October 2021 and March 2022 (including invasion of privacy), but lost both cases.

Then, in a closed trial in May 2024, a Shanghai court ruled that Zhang’s public complaints went beyond what magistrates considered reasonable, factual criticism and ordered her to publicly apologize and pay 170,000 RMB ($23,000) to cover damages and the legal costs for Tesla.

Zhang has appealed the ruling. “I refuse to accept it. 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,” she told AP.

But the report noted that her odds of winning the appeal against Tesla do not look good. Tesla has not only won the defamation cases it brought against unhappy car owners and critical journalists, it’s also prevailed in lawsuits customers have filed against it.

Tesla’s Legal Strategy in China: Silence Critics, Sue Complainants

Zhang is not alone in her experience. The report noted that Tesla has pursued 14 and won at least 11 such defamation cases in China against clients who complained or criticised its products.

In the last four years alone, six car owners who complained about accidents, mechanical failures, sudden vehicle malfunction and quality issues were sued by Tesla. Besides these, six bloggers and two media outlets also recieved papers, the report added citing public Chinese court documents and local news reports. As of now, Tesla has won 11 cases, with two undergoing appeal (including Zhang’s case) and one case settled out of court.

While Tesla CEO Elon Musk proclaims being a “free speech absolutist” his company in China is using local laws to go after critics — even if its their own clients, the report noted. And while Chinese laws allow for automakers to sue customers, Tesla has adopted the practice most aggressively, it added.

Political Favour, ‘Unofficial’ Media Gag

The report further added that Tesla enjoys favour from powerful leaders in China’s ruling party and is using the contacts to “silence critics, reap financial rewards and limit its accountability”.

Tesla officials in China and the US did not respond to queries, AP said.

The publication found that Tesla won nearly 90 per cent of civil cases over safety, quality or contract disputes brought by customers. Qiao Yudong, a former lawyer for American sports car company Saleen Automotive in China told AP, the lopsidedness has forced extreme action from some customers. And among these desperate ones are Zhang.

Two Chinese journalists based in Shanghai told AP there is an “unwritten rule” to avoid critical coverage of Tesla.