Tesla Files Libel Suit Against Chinese News Outlet

Tesla has filed a libel suit against the Chinese news outlet PingWest, which published a story describing alleged “sweatshop” conditions at its Gigafactory Shanghai. The PingWest story described demanding bosses and possibly unsafe, low-tech conditions at the Gigafactory.

Tesla and SpaceX have both gained something of a reputation as being demanding companies to work for even in the United States. Disgruntled former employees have described Elon Musk as being a bad-tempered boss, especially on the day after a mishap such as an exploding Starship prototype.

Employees have accused Musk’s companies of being anti-union, and Tesla has sued at least one former employee named Martin Tripp alleging that he stole protected company secrets and presented them in a way that made conditions in the Gigafactories out to be worse than they really were.

The presiding court found the defendant in that case to be in violation of the Nevada Computer Crimes Law, which bans unauthorized use of data, and dismissed the former employee’s countersuit alleging that Tesla and Musk defamed him in publicly accessible statements. However, the judge also found that the defendant’s allegations of unsafe factory conditions did not impact the price of Tesla stock.

Musk apparently doesn’t flinch away from the occasional appearance of poaching employees, ranging from scouting local restaurants for “employees of the month” to staff a frozen yogurt stand at a SpaceX facility to, more recently, hiring a Mercedes-Benz factory manager for the Gigafactory being built in Germany. On several occasions, he has admitted that he cares mostly about raw talent and drive when hiring, most recently saying that he doesn’t much care if applicants for Tesla’s AI department have a college degree.

His hiring and management practices do seem to work in terms of productivity despite his reputation for being a tough boss. Tesla delivered a record-setting 499,550 electric vehicles in 2020. SpaceX also had an impressive year with its launch of the first two crewed missions for NASA’s Commercial Crew program and a total of 25 launches in 2020.

This level of success has not always stopped the media headlines that, if Tesla’s most recent allegations against PingWest are to be believed, are overly sensationalist and borderline libel. It may even be a little hypocritical for a Chinese news outlet to accuse an American-based company of sweatshop conditions in its Gigafactories, considering that sweatshops and forced labor are common practices in Chinese factories. Most recently, China has been accused of forcing minorities like the Uighur Muslims into forced labor.

In Tesla’s most recent legal case, Global News reports that Tesla has filed an “indictment, a notice of responding to prosecution, as well as other affidavit.” PingWest has until February 8 to respond to the filings and has already said that it will “actively cooperate” with proceedings in Tesla’s lawsuit. Even with the poor PR and alleged libel that comes with the accusations of sweatshop conditions at Gigafactory Shanghai, Tesla electric vehicle sales in China do remain strong and may make up 40 percent of Tesla’s sales by 2022.