France says Tesla lied about FSD and more, 4 months to comply or be fined

The French Ministry of the Economy has found that Tesla violated the law in several ways related to “deceptive business practices,” and has ordered the company to comply in 4 months or face a fine for every day it does not.

The investigation started in 2023, in response to several reports through France’s consumer complaint service SignalConso.

It concluded today, and French authorities from the DGCCRF (Directorate-General for Competition, Consumer Affairs and Fraud Prevention) division of the Ministry of the Economy found several examples of ways that Tesla had misled customers or otherwise failed to comply with French consumer protection laws.

A summary of the ruling in French is available here, and here are the bullet points via browser translation:

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• Sales contracts without date or deadline or place of delivery of the vehicle and not mentioning payment on credit;
• Payments required before the end of the withdrawal period enjoyed by the consumer when he finances his purchase with an assigned credit;
• Absence of receipt valid in the event of partial cash payment;
• Misleading business practices regarding the fully autonomous driving capacity of TESLA vehicles, the availability of certain options and vehicle trade-in offers;
• Failure to refund within the deadlines of orders for which consumers have exercised their right of withdrawal;
• Lack of prior information on delivery methods and in particular its place;

France has given Tesla 4 months to comply with its order. If it doesn’t, France will fine the company 50,000 euros ($58k USD) per day.

Most of these bullet points deal with the ordering and delivery process, and it seems that French authorities took issue with the haphazard nature in which Tesla vehicle deliveries can often happen. They took issue with Tesla’s incomplete sales contracts, sudden and/or repeatedly changing delivery times or locations (and the value of trade-in offers), and failure to refund deposits in a timely manner.

But the meatiest bullet point there is the one about “misleading business practices,” especially given this weekend’s news of Tesla’s Robotaxi launch in Austin.

France finds that Tesla lied about FSD

French authorities found that Tesla had misled customers “regarding the fully autonomous driving capacity of TESLA vehicles.”

Since 2015, Tesla has sold some sort of partial automation to the public. This started in the form of Autopilot, which was released in the US in late 2015 and focused on highway driving only (though it came later to France than the US). More recently, Tesla’s focus has been on Full Self-Driving, or FSD, which is more capable than Autopilot and works on surface streets as well as highways.

Tesla has sold FSD software for various prices over the years, as high as $15,000. It currently sells “Capacité de conduite entirément autonome” in France for 7,500 Euros.

The problem is: this software does not, in fact, drive you entirely autonomously. It is, at the moment, a “level 2” driver assist function, which still requires a driver in the driver’s seat to take full responsibility for the vehicle. Higher levels, 3 and above, could be considered “self-driving,” where the car takes responsibility at certain times, and above level 4, there’s no requirement for a driver to even be in the driver’s seat.

Another wrinkle is that even the driver-assist version of FSD is currently not active in France. There has been a long process to bring FSD to Europe (here’s a recent report about how Tesla used a Dutch loophole to approve Autopilot in the first place), but it’s still not complete.

So, everyone who has bought the system in France has not yet been able to use it. Even if they could use the version that the US has, it would still not qualify as fully self driving.

In addition to this, Tesla has made several statements over the years suggesting FSD’s capabilities will be greater than they currently are. For example, in 2019, Tesla CEO Elon Musk said “if you buy a Tesla today, I believe you are buying an appreciating asset – not a depreciating asset.” He said this on the premise that FSD software would be so valuable that the price of cars that had it would skyrocket. In fact, he said it wouldn’t even be worth it for Tesla to sell cars anymore, because they’d be more valuable to use to make money as autonomous taxis.

Musk even promised that you, the customer, would be able to send out your car as an autonomous taxi to make you money, something that Tesla is now doing, but still not allowing customers to do. He has continued making the same promise, as recently as a few hours before this weekend’s Robotaxi launch.

Elsewhere in France, Tesla is also facing a lawsuit by a group of French Tesla owners who want to get out of their leases early due to Musk’s recent unwise political activity turning their vehicles into “far-right totems.”

Electrek’s Take

The complaints should not be particularly surprising to those who have followed Tesla for some time.

Mostly, they reflect the haphazard nature of Tesla’s vehicle ordering and delivery process which we have come to… love? hate? let’s go with “understand” over the years.

While Tesla does eschew dealerships and has made the vehicle ordering process much simpler in many ways, it’s also true that if there’s ever any reason for deviation from the plan, it’s pretty easy for customers to fall through the cracks and have little recourse. So, the reports of incomplete paperwork, rapidly-changing delivery times and so on should sound familiar to those of us who’ve been around for a while.

Same goes for failure to refund – Tesla has long tied a “reservation fee” to new vehicle announcements, which is often said to be fully refundable at any time. Some customers have had difficulty getting those refunds in a timely manner or at all.

The most interesting part about this order is how sweeping it is. Rather than finding fault in a single practice, it dings Tesla for a litany of issues that have been issues for a long time. Unlike the feckless enforcement that we often see in the US, France seems serious.

The fine is also substantial, but for one of the largest companies in the world (by market cap, anyway), it does seem absorbable. While ~$5 million per quarter is a fair chunk of change, it’s nothing compared to Tesla’s Q1 revenue of $19.3 billion or profit of $409 million.

But, given drastically falling sales in France, maybe it’s enough compared to the profits Tesla gets out of that territory. At a current sales rate of a few thousand cars per quarter, and given Tesla’s current ~2% profit margin and assuming an average selling price of somewhere around ~$60k, a fine of $5 million per quarter would basically eliminate any profits for the company from France.

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