Tesla Loses Appeal Related To Used Model S Fraud Case In China

Tesla has faced many issues in China, and losing this appeal certainly doesn't help.

By: Steven Loveday

Oct 1, 2021 at 9:47am ET

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A Tesla Model S driver in China sued the automaker for fraud after he claimed that Tesla misrepresented the condition of the car at the time of purchase. The Tesla owner, Han Chao, won the case in court.

According to information from the Bloomberg video above, as well as a written article from Bloomberg News, a court in Beijing found Tesla guilty of selling a used Model S that had undergone substantial repairs due to a crash, though it seems Tesla didn't disclose the information. The automaker tried to argue that just because the car was welded doesn't suggest it had any "structural damage."

Han Chao purchased the used Model S for 379,700 yuan ($58,700) using Tesla's official used car platform in China.

According to reports, Tesla has to refund Chao for the total cost of the car. In addition, the automaker must pay damages that amount to three times the car's purchase price when it was sold to Chao. The total damages add up to over 1.5 million yuan (~$233,000). This is the largest cash payment Tesla has incurred in China to date. It's important to note that the original ruling already spelled all of this out. However, Tesla issued an appeal, and it has now lost again.

Tesla is in the midst of other lawsuits in China, including those that people have filed against the company for defamation, as well as a few countersuits in which Tesla is suing back for defamation. One of the suits alleges that Haun is tarnishing Tesla's image due to the situation, as he continues to post negative information about the company on social media.

Despite the run of bad publicity for the automaker, it continues to make notable strides in China and abroad. The company recently started producing Model Y vehicles at its Shanghai Gigafactory and importing them to Europe. That said, Tesla is expected to have another record quarter for deliveries. Some folks estimate that Tesla's China sales will be impressive on their own.