Tesla Hits Back At JPMorgan With Counter Lawsuit That Claims Bank Holds 'Animus' Against Elon Musk

Tesla is launching a legal counterattack on JPMorgan, the largest bank in the U.S., over a suit related to a bond deal from seven years ago. At the center of its argument is a claim that JPMorgan just doesn’t like Tesla founder and CEO Elon Musk.

On Monday, Tesla filed a counter lawsuit against JPMorgan in response to an earlier $162 million suit the bank made in a New York federal court in November. In its affidavit, Tesla alleged the bank’s decision to sue amounted to “bad faith and avarice.” In particular, they accused unnamed JPMorgan senior executives of holding "animus towards Mr. Musk."

It has been reported by The Wall Street Journal that there has been a long-running feud between Musk and JPMorgan CEO Jamie Dimon. Both known as strong-willed and combative titans within corporate America, they have failed to patch up their differences likely because of early bad blood between their companies.

JPMorgan was initially cautious about supporting Tesla because of doubts it had about the future of electric cars, the Journal reported. It added that Tesla and JPMorgan worked together on the carmaker's initial public offering in 2010, but they have not conducted any further business since 2016.

The roots of Monday’s lawsuit, however, go back to a tweet by Musk in 2014 when a bond pricing deal was struck with JPMorgan that guaranteed its warrants, allowing the bank to acquire stock in Tesla at a set price when they expired in June and July 2021. Four years later, Musk tweeted he had the funding to return Tesla to becoming a private company, something later used by JPMorgan as justification to lower the strike price of the warrants.

According to their lawsuit, Tesla paid JPMorgan billions of dollars in stock last summer, but JPMorgan demanded more money, citing Musk's tweet to make Tesla private. Tesla said the bank broke the contract and instead should have canceled the warrants and returned them.