• Elon Musk’s Tesla is facing strike action in Sweden.
• The Swedish strike has inspired several sympathy strikes in nearby countries including Finland. 
• The coordinated industrial action is causing headaches for Tesla’s operations in the country.

Elon Musk is at war with a group of Swedish workers.

The billionaire’s EV company, Tesla, faces a wave of strikes across the nation.

The industrial action began in late October when the trade union IF Metall announced a walkout in Sweden. Since then, several other unions, including labor groups in nearby countries like Denmark, Norway, and Finland have joined in solidarity.

The Swedish workers want to force a collective agreement on Tesla, which is commonplace in the country.

“Coverage of collective agreement is extremely high in Sweden,” Lars Calmfors, a professor of international economics at Stockholm University, said. “If you look at the whole economy, somewhere around 85% of all employees are covered by collective agreement.”

There is no legal minimum wage in Sweden, instead, the nation relies on collective agreements to keep compensation fair.

Relationships between unions and companies in the country are also relatively harmonious.

“There is a strong tradition of cooperation between unions and employers in all the Nordic countries. But this culture of
cooperation is especially strong in Sweden with a very low level of
industrial conflict,” Calmfors said

US companies have to play by Swedish rules

The situation Tesla has found itself in is not unprecedented.

“International corporations often have their own compensation and pension systems that conflict with the systems that we have in Sweden,” Calmfors said.

US company Toys R Us faced similar industrial action when it refused to give workers a collective agreement in the 1990s. After a three-month strike, the toy company reached an agreement with the Swedish retail store employees’ union and essentially gave in.

The coordinated sympathy strikes are already causing a headache for Tesla’s operations in the country.

The Swedish postal service successfully halted deliveries of new license plates for the EVs, while Danish dockworkers refused to unload the Tesla vehicles.

Musk even publically lashed out at the workers, calling the strikes “insane.”

Tesla has a lot to lose

The Swedish Tesla strike is a relatively small one. The EV company doesn’t have a factory in the country and only employs around 120 people at its service facilities in Sweden.

The market is not especially important to Tesla, but giving in to the Swedish strikes may cost the company more in terms of reputational damage.

“Tesla doesn’t have a collective agreement anywhere — at least not a voluntary one,” Calmfors said. “If they would enter a collective agreement in Sweden, it would show workers in other countries that this red line is not absolute.

“It’s not the consequences in Sweden of collective agreement that they fear, it’s that it might provide an incentive for unions in other countries.”

But Tesla is facing a formidable opponent in the Nordic nation, Calmfors said.

“Unions are afraid of what this might start in the longer run,” he said. “If it becomes accepted that big firms in Sweden could be without the collective agreement, I think they fear that this strong social norm will be weakened over time.”

The striking workers are partially funded by unions, which provides an extra incentive to strike, he said.

“It’s a big thing for both Tesla and for Swedish unions,” he said. “But I think the most probable outcome is that Tesla will lose.”

BI approached Tesla for comment on the strikes but did not immediately hear back.