Electric car maker Tesla Motors is being sued in China for trademark infringement, a development that could hurt CEO Elon Musk's goal to expand the company's presence in the biggest auto market in the world.
Tesla said back in January that the trademark dispute between the company and Chinese businessman Zhan Baosheng had been resolved. The EV maker even started delivering its Model S vehicles to Chinese customers in April.
Baosheng, who registered the "Tesla" trademark before the U.S. company came to China, is now taking the company to court. He is demanding that the company stop all sales and marketing activites in China, close its showrooms and supercharger facilities, and pay him 23.9 million yuan ($3.85 million) in compensation, according to Reuters, citing his lawyer Zhu Dongxing.
The Beijing Third Intermediate Court will hear the case on Aug. 5.
Tesla China and Baosheng have not commented publicly on the lawsuit yet.
Companies like Apple and Unilever NV have all been involved in trademark disputes in the country in previous years.
In 2013, Apple reached a $60 million deal for the rights to use the iPad trademark in China.
Baosheng registered the trademarks to Tesla's name in English and Chinese back in 2006. He had attempted to sell the label in the past to the U.S. but negotiations fell apart.
Tesla's current lawsuit brings uncertainty to the automaker's future in China, which the company had expected to become its largest global market by 2015.
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