Musk and Tesla are battling unions across Scandinavia. What comes next in the labor dispute?

Tesla has found itself locked in an increasingly bitter dispute with union workers in Sweden and neighboring countries. The showdown pits the electric car maker’s CEO Elon Musk, who’s staunchly anti-union, against the strongly held labor ideals of Scandinavian countries.

None of Tesla’s workers anywhere in the world are unionized, raising questions about whether strikes could spread to other parts of Europe where employees commonly have collective bargaining rights — notably in Germany, Tesla’s most important European market.

Here are key things to know about the union fight:

Hoe did the Tesla strike gain steam?

About 130 mechanics at 10 Tesla garages across Sweden walked off the job on Oct. 27 over the company’s refusal to sign a collective bargaining agreement. Tesla doesn’t have a factory in Sweden, but does have a network of service centers.

Since the mechanics with the powerful Swedish metalworkers’ union IF Metall went on strike, other workers around the country have joined in sympathy, withholding their services to pressure the company.

Members of the country’s transport union say they’ll stop collecting waste from Tesla service centers starting Sunday. Employees with supplier Hydro Extrusions, which makes aluminum profiles, are refusing to make a component for Tesla cars.

Other unions say their members won’t paint Tesla cars, clean the company’s offices or service electrical systems at its workshops or any of its 70 charging stations in Sweden.

Postal workers have stopped delivering license plates for new Tesla vehicles, prompting Tesla to sue the Swedish Transport Agency, demanding that it be allowed to retrieve the plates, and PostNord, the company that delivers the registration numbers. Tesla lost an early battle in the case, which is still working through the courts.

The boycott has escalated by spreading to neighboring Nordic countries. Like in Sweden, dockworkers in Denmark won’t unload Tesla vehicles arriving at ports. Unions in Finland and those in Norway have warned that workers at ports and workshops will join the strike if the dispute isn’t resolved by Wednesday.

Who else is pressuring Musk?

A group of 16 institutional investors including KLP, Norway’s biggest pension fund, and PensionDanmark, have written to Tesla board chair Robyn Denholm. They have urged the company to reconsider its approach to unions and asked for a meeting to discuss it further.

PensionDanmark has sold its 476 million kroner ($70 million) stake in the carmaker, saying it’s putting Tesla on its blacklist “in the light of the conflict spreading to Denmark and Tesla’s latest and very categorical denial to reach collective agreements in any country.”

Paedagoernes Pension, Denmark’s teachers’ pension fund, sold its 242 million kroner ($35 million) stake in Tesla because it “cannot compromise” on its core values, CEO Sune Schackenfeldt said in a statement.

The fund discussed workers’ rights with Tesla in March, but Musk’s “hard course against the Nordic trade union movement” makes continued investment unsustainable, it said.

Why are unions so important in Nordic countries?

Sweden is one of the most highly unionized countries in Europe, with nine in 10 workers covered by collective agreements.

Across Scandinavia, trade unions and employers negotiate deals on wages and working conditions, with almost no involvement from the state. It’s a system that originated in the 1930s and is widely acknowledged as the backbone of a labor market model that has helped workers benefit from decades of economic prosperity.

The system results in fewer strikes than in other countries like France and Germany, because negotiations are the first avenue to resolve disputes.

Tesla’s attempts to secure a quick win in the license plate clash through Swedish courts “appears to be having precisely the opposite impact, making unions more steadfast and creating sympathetic actions across the country,” said Matthias Schmidt, an independent auto analyst.

Collective agreements allow “for companies to operate on a level playing field, while avoiding the risk of any one employer distorting competition in the sector by imposing poor conditions on their employees,” the IF Metall union says.

In a famous example of this model’s success, the Toys R Us toy chain started up in Sweden in 1995 and hired only nonunion workers. The chain refused to sign such collective agreements. It resulted in a three-month strike by the retail employees union that snowballed into an all-out boycott as other Swedish unions joined in sympathy strikes. The company eventually agreed to sign collective deals.

What has Musk said?

He’s never hidden his disdain for unions, writing, “this is insane,” on his social media platform X, formerly known as Twitter, in response to a tweet about Swedish postal workers refusing to deliver license plates.

In the U.S., Musk has picked online fights with the United Auto Workers and vehemently battled union legal challenges to his company’s actions.

“I disagree with the idea of unions,” Musk said in a November onstage interview with The New York Times. “I just don’t like anything which creates kind of a lords and peasants sort of thing.”

Musk, the world’s wealthiest person, said that unions try to create negativity in a company, denying that Tesla has a wealth hierarchy largely because the company awards everyone stock options.

“Everyone eats at the same table. Everyone parks in the same parking lot,” he said.

Musk has accused the UAW of driving General Motors and Chrysler into bankruptcy, costing many workers their jobs. He said that if Tesla becomes unionized, “it will be because we deserve it and we’ve failed in some way.”

Tesla didn’t respond to a request for comment.

What could happen next?

Watching from the sidelines are labor organizers in Germany, where Tesla opened its first European gigafactory in 2022. The plant in Grunheide, southeast of Berlin, employs 11,000 people. It makes both batteries and Model Y SUVs.

Germany is the company’s biggest market in Europe, selling 55,000 vehicles so far this year, three times as many as in Sweden, according to data from Schmidt.

Labor organizers are on a union drive to sign up Tesla workers and say the numbers are rising quickly.

Workers and unions in Germany are banned from joining sympathy strikes, but that might “act as a catalyst to German Tesla production line workers to join local unions that can strike a good deal for them,” Schmidt said.

Germany’s IG Metall union says it’s concerned about occupational safety at the plant and has fielded reports from “numerous employees” about accidents and health problems that resulted in high staff sickness rates.

Christiane Benner, the union’s newly elected chairwoman, has Tesla in her sights.

“We don’t allow union-free zones! Not even on Mars, Elon Musk!” she said in her inaugural speech in October.

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