The second-largest electric vehicle American manufacturer, Tesla, has been embroiled in multiple controversies over the past few years. However, the recent Tesla lawsuit may have a significant impact on both the company and the entire automotive industry. The Florida-based lawsuit began when George McGee, the owner of a Tesla vehicle, hit and killed someone with his car in 2019. McGee argues that the Autopilot system of the car should have been able to apply the brakes after it crossed a red light and a T-intersection at 117 kilometers per hour.

The history and its consequences

Tesla has been credited with revolutionizing the automobile industry. With its sustainable energy mission, record-setting engineering advancements and ground-breaking innovation, the number of lawsuits Tesla has faced can change the face of the electric vehicle industry. 

Tesla has created a reputation of trustworthiness, frequently advertising the safety of its cars. In its safety report, Tesla has termed itself “the safest car in the world.” This lawsuit, however, might just prove what hundreds of others have sued for: Tesla exaggerates its capabilities. To provide a brief background, multiple investigations have taken place to look into the strong claims made. Tesla has argued that it has prevented deaths and promoted safe driving. Furthermore, on its website, it mentions that for the car to work to its full potential, the driver must be attentive while driving. This is a weak argument, as a rational driver with a peaceful mind would be able to be an attentive driver. 

This article seeks to identify and evaluate the impact of the lack of accountability taken by Tesla, the high competition Tesla faces with Chinese electric cars and other competitors, and interpret the negative impact of this on both Tesla and the automotive industry entirely. 

Tesla’s shortfalls

Tesla has not been transparent in the process of its civil cases, and other car companies have followed suit. One of these cases was that of Zhang Youshou, who sued Tesla–once for its failed brakes, and a second time for the heavy criticism she received after being labeled as a “troublemaker.” Tesla, however, refused to take any action. Whether it was providing her with the database Youshou required or failing to protect her privacy, Tesla had severely harmed the security of its customer. This caused a lack of accountability, leading Zhang Youshou to file a case for defamation. Zhang lost both cases, indicating a strong lack of accountability by Tesla by risking the personal information of their customers. 

Noting the high level of civil cases won by Tesla, it's a clear indicator that Tesla favours profits over customer satisfaction. The Associated Press has found out that 90% of civil cases in which Tesla was a party, Tesla has won. While in a capitalist country such as the United States, this may not pose a problem, but this may provide leverage for other countries, specifically China, to overtake the autonomous vehicle industry. 

The threat

Given that Chinese electric cars have dominated the market share in 2024, Tesla must attempt to increase its customer satisfaction to maintain its existing customer base. 

The Chinese electric car market will likely take over, both in the United States and globally. In a survey taken by Kerrigan Advisors' 2025 OEM Survey, where they accounted for the opinions of top leaders in the automotive industry, 70% are worried about the financial implications it may bring. This is a rightful fear, given the incentives Chinese cars provide over American cars. While American cars, such as Tesla, may have better brand names, with their attractive low prices, technologically advanced systems, and quick production cycles, Chinese cars are far ahead of Tesla. 

Changan Jordan, a Chinese car manufacturer, produces cars that come with either a ten-year warranty or a 500,000 km engine warranty. To give a glimpse of how long a 500,000 kilometer range works, a Toyota car that has been continuously used for twenty years every day, will only reach 425,000 kilometers. These features, along with the solid functioning of the car, can be incredibly attractive, especially for middle-class families looking for an affordable and long-lasting option.

Through and through, Tesla has lacked accountability, and in its wake has set a bad precedent for the rest of the domestic automobile industry. Through these civil cases, it has become clear that Tesla is more focused on profits rather than customer satisfaction. For a company that is losing its market share to Chinese electric companies, Tesla should prevent this by improving both its public image and promoting cars without exaggeration. But as for now, this latest Tesla lawsuit might work in favor of Chinese car manufacturers to build on their reputation as safe, cheap and technologically reliable cars.