Tesla loses court case in China, and possibly its reputation

Elon Musk was singing China’s praises as recently as last week — and he might want to keep belting it out. A Beijing court found Tesla guilty of fraud for claiming a used car was in better condition than it was.

• The $58,700 Model S still had structural damage after an accident, but buyer Hán Cháo 韩潮 apparently wasn’t told. He sued the carmaker and won over $232,000.
• It’s unclear if Han or Tesla is unluckier that he bought the car; Tesla has been criticized relentlessly by Han, who has over 120,000 followers on Weibo, ever since.

Why it matters: Tesla, the first foreign car company to be allowed a wholly-owned factory in China, is keen to steer clear of negative press in a country where boycotts have targeted countless foreign brands.

• But the carmaker can’t seem to avoid controversy; it has endured a massive recall due to software issues, rumored brake failures, and a woman’s viral protest atop a car.
• And the current saga is far from over. Tesla is countersuing Han for slander after he called it a “hooligan company.”

Meanwhile: Musk’s Chinese rivals are speeding ahead. Over the summer its sales in China dropped 29% year-on-year while XPeng and Li Auto reported new records. Next, XPeng and NIO are expanding to Europe.