A federal jury found that Owen Diaz, a lift operator at the Fremont factory from 2015 to 2016, was subjected to a racially hostile work environment; however, the payment he was initially awarded in 2021 has been reduced by 98% to $137 million.
A judge ruled last year that the initial amount was excessive.
On Monday, Mr Diaz was awarded $3m in punitive damages and $175,000 in damages for emotional distress.
“If we had been allowed to introduce new evidence, the verdict would’ve been zero imo,” Tesla chief executive Elon Musk said on Twitter.
“Jury did the best they could with the information they had. I respect the decision,” he added.
Mr Musk did not provide details of what new evidence Tesla would have presented.
Tesla’s lawyer Alex Spiro declined to comment. The company did not immediately respond to a BBC request for comment.
In the original lawsuit, Mr Diaz alleged that African-American workers “encountered a scene straight from the Jim Crow era” at the firm’s plant in Fremont, California.
He claimed that black workers regularly faced racist slurs on the factory floor and racist graffiti in bathrooms.
The lawsuit also said that employees would refer to areas where black or African-American staff worked with racist historical names, such as “the plantation”.
It alleged that one worker heard racial slurs “as often as 50-100 times a day”.
In 2021, a federal court in San Francisco found that Tesla did not take reasonable steps to tackle the abuse, despite complaints to supervisors.
The jury awarded Mr Diaz $137m in damages. At the time Tesla disputed the verdict but said it recognised it was “not perfect”.
In April 2022, a US federal judge cut Mr Diaz’s award to $15m and said the compensation decided by jurors was “extremely high”.
Bernard Alexander, a lawyer for Mr Diaz, said last week that: “Mr Diaz’s outlook on the world has been permanently changed. That is what happens when you take away a person’s safety.”
Mr Alexander had called on jurors to award his client nearly $160m in damages.
However, Tesla’s lawyer, Mr Spiro, argued that Mr Diaz’s lawyers had failed to show that any serious, long-lasting damage had been caused by Tesla.
“They’re just throwing numbers up on the screen like this is some kind of game show,” Mr Spiro said.
