Tesla: The Union Conflict in Sweden, a Time Bomb?

Tesla? Signals suggest the worst for the American manufacturer.

Elon Musk’s approach of dismissing union conflicts in Sweden could now spread to other countries and set a dangerous precedent. It would be ironic for an electric car manufacturer. The situation recalls the union movement that cost companies billions of dollars in the United States at the start of autumn.

Tesla was watching from afar, promising bankruptcy for its competitors. However, the contagion has also spread to Elon Musk’s factories, and Sweden is becoming a European metastasis that begins to worry the Californian brand. What was initially thought to be a fever that would pass in a few days is now firmly entrenched, and Danish dockers have come out in support of their Swedish colleagues. Delivery to the Scandinavian country is now suspended as a gesture of solidarity.

It would only be missing that the union movement spreads to other regions — China, Germany, the United States — for Tesla’s inflexibility during negotiations to come back to haunt it. Because the world is changing at an unprecedented pace. Elon Musk’s argument was that Sweden’s image would be tarnished in the eyes of foreign investors. But the issue can be viewed differently: Sweden doesn’t need to sell its social model cheaply by opening its doors to actors merely interested in doing business. No Tesla factory is located in this northern country.

Today, Tesla is doing well as major industrialized countries switch to electric vehicles. But market shares are shrinking, and competition is intensifying every day. Sales are nonetheless declining in China compared to 2022. The power dynamics will also shift, especially as Europe considers seriously closing its borders to imports to reindustrialize its territory.

As for China, the myth of cheap labor is also fading. In 2023, the average salary in Shanghai province, where many manufacturers are located to benefit from port infrastructure necessary for exports, is estimated at 1,400 euros — nearly 50% higher than in many Eastern European countries.

This is where Sweden’s call to raise wages and improve working conditions could quickly spark similar initiatives elsewhere. Often, it is better to address emerging small problems before they grow into large issues. Elon Musk’s artificial intelligence software might have convinced him of this.