Zhang Yazhou was in the passenger seat of her Tesla Model 3 when she heard her father shout in panic: "The brakes don’t work!" As they approached a red light, he swerved around two cars before crashing into an SUV, a sedan, and ultimately a concrete barrier.

In shock, Zhang stared at the deflating airbag in front of her. What she didn’t expect was what came next—Tesla sued her for defamation after she publicly criticized the car’s brakes and won.

A Chinese court ruled that Zhang must pay over $23,000 in damages and issue a public apology to the $1.1 trillion company.

Zhang is not alone. In the past four years, Tesla, led by billionaire Elon Musk, has sued at least six car owners in China who complained about sudden malfunctions, quality issues, or accidents they attributed to mechanical failures. The company has also taken legal action against at least six bloggers and two media outlets that published critical reports. According to an Associated Press review of court records, Tesla won all 11 cases where verdicts were available. Two cases, including Zhang’s, are under appeal, and one was settled out of court.

It is highly unusual for an automaker—whether in China or elsewhere—to sue its own customers. However, Tesla has adopted an aggressive legal strategy, leveraging its close ties with powerful figures in China’s ruling Communist Party to silence critics, protect its profits, and minimize accountability.

The AP’s investigation into Tesla’s record in China comes as Musk exerts growing influence in President Donald Trump’s administration. Musk has played a key role in reshaping the U.S. government, pushing for drastic spending cuts, program suspensions, and the removal of officials deemed disloyal to Trump. His influence has raised concerns that he is weakening traditional government checks and balances to benefit Tesla and his other companies.

In China, Musk has thrived in a system where regulators, the media, and the courts are all closely aligned with the Communist Party. Tesla has received substantial state support, including regulatory benefits, low-interest loans, and significant tax breaks. The Chinese press, with few exceptions, has also treated Tesla favorably, with journalists telling AP they were instructed to avoid negative coverage of the automaker.

This favorable treatment extends to the courts. Tesla has not only won cases it brought against dissatisfied customers and critical journalists but has also prevailed in lawsuits filed against it. The AP found that Tesla won nearly 90% of civil cases brought by customers over safety, quality, or contract disputes.

Zhang’s Battle Against Tesla

Zhang’s legal troubles began in February 2021, after the crash in Henan province that left her parents hospitalized for four days. While police blamed her father for not maintaining a safe following distance, Zhang insisted the brakes had failed. She filed a complaint with regulators, seeking a refund and compensation. When Tesla refused to provide the full pre-crash data, she took matters into her own hands.

She staged protests, draping her damaged car with a banner reading "Tesla brake failure" and demonstrating outside Tesla showrooms. Her most dramatic protest took place at an auto show in Shanghai, where she climbed onto a Tesla display car, shouting, "Tesla brakes fail!" Security guards removed her, and she was detained for five days.

Tesla denied her allegations, claiming she was making trouble for financial gain. Frustrated, Zhang sued Tesla for defamation, arguing the company had falsely portrayed her as a troublemaker. However, she soon found herself facing a countersuit from Tesla.

Tesla claimed she deliberately spread false information that harmed its reputation and sought $684,000 in damages. In May 2024, a Shanghai court ruled against Zhang, ordering her to pay Tesla $23,000 and issue a public apology. She has appealed the decision, arguing that as a customer, she has the right to voice her concerns.

Zhang’s chances of winning her appeal appear slim. The AP review found that Tesla has dominated in Chinese courts, winning the vast majority of cases against customers. Out of 81 lawsuits filed by Tesla owners over safety, quality, or contract issues, Tesla won 72.

A statement from the Shanghai High People’s Court insisted its rulings were fair, stating that verdicts are based on objective facts and not influenced by special treatment.

Tesla’s Success in China

Tesla’s legal victories reflect its broader success in China, which has been significantly aided by Premier Li Qiang, the former Shanghai party chief and now the country’s second-most powerful leader. Under Li’s leadership, Tesla became the first foreign automaker allowed full ownership of its China operations, receiving generous tax breaks and loans.

With government backing, Tesla’s Shanghai factory was built in record time, helping the company achieve profitability for the first time in 2020. Tesla’s presence has also propelled China’s electric vehicle (EV) industry. Today, EVs account for over half of new car sales in China, and domestic automakers like BYD have become global competitors.

Musk maintains close ties with Li, meeting with him regularly when visiting China. His influence in both China and Trump’s administration highlights his ability to navigate political landscapes to advance his business interests.

Tesla’s privileged position in China has contributed to its rapid expansion, but for customers like Zhang, it has also made it nearly impossible to challenge the company when things go wrong.