Musk vs. Dimon, Emotional Clash Escalates into a 200 Billion Won Lawsuit Battle

[Asia Economy Reporter Yujin Cho] The years-long conflict between Elon Musk, CEO of Tesla, and Jamie Dimon, CEO of JP Morgan Chase, is escalating into a 200 billion won legal battle, the Wall Street Journal (WSJ) reported on the 22nd (local time).

Elon Musk, Tesla CEO (Photo by AP Yonhap News)

The conflict between the two companies, sparked by JP Morgan, the largest bank in the U.S., repeatedly rejecting Tesla, the largest electric vehicle company in the U.S., is intensifying into a clash between the CEOs and a courtroom dispute.

According to WSJ, citing sources familiar with the matter, Musk and Dimon recently attempted to reconcile the conflict between the two companies that has lasted for several years through dialogue, but their relationship instead worsened. As a result, JP Morgan recently decided to "go without Tesla," and this decision has led to a lawsuit worth approximately 190 billion won, sources said.

JP Morgan avoided providing financial support to Tesla in the early days of electric vehicle launches due to a low long-term outlook, and Musk also opposed Dimon's proposal to designate Chase Bank as the primary lender for Tesla buyers. Instead, Chase Bank signed a similar contract with Rivian, a competitor rising against Tesla.

Meanwhile, on the 16th, JP Morgan filed a lawsuit against Tesla demanding payment of $162 million (approximately 190.9 billion won), bringing the conflict between the two sides to the surface.

According to the complaint submitted by JP Morgan, the lawsuit is based on Tesla’s violation of a warrant agreement signed by the two companies in 2014. Under the agreement, if Tesla’s stock price is higher than the agreed exercise price of the warrant at its expiration in June and July of this year, Tesla must pay JP Morgan in stock or cash.

JP Morgan adjusted the warrant exercise price citing Musk’s 2018 tweet about considering Tesla’s delisting, but Tesla did not recognize the adjusted price and paid based on the originally agreed exercise price.

In the complaint, JP Morgan claimed, "Tesla blatantly ignored its clear contractual obligation to pay JP Morgan in full," while Tesla criticized, "JP Morgan’s adjustment of the exercise price was unreasonably rapid and an opportunistic attempt to exploit stock price volatility."

When WSJ requested Musk’s response to JP Morgan’s lawsuit, he retorted, "If JP Morgan does not withdraw the lawsuit, I will give them a one-star review on Yelp (a restaurant review app)," adding, "This is my final warning."