Tesla is being sued in China over not delivering self-driving to HW3 cars

Owners in China are suing Tesla over not delivering the promised self-driving capability on vehicles equipped with Tesla’s older HW3 computer (manufactured from 2019 to 2023).

Tesla claimed that all vehicles built since 2016 have the hardware capable of achieving “full self-driving” (FSD). The company has been selling a software package called “Full Self-Driving” (FSD), which it claimed would deliver unsupervised level 4-5 self-driving capabilities, but it hasn’t.

When it comes to cars produced up until 2024, vehicles equipped with its HW3 computer, Tesla has admitted that the hardware won’t support unsupervised autonomous driving as promised.

CEO Elon Musk said that Tesla would offer retrofits, but owners have serious doubts due to the scale and complexity, and the fact that Musk first admitted the hardware wouldn’t support the promise in January, and Tesla hasn’t shared a word about plans to make things right since then.

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This has led to a class action lawsuit in the US.

Now, Tesla owners in China are also turning to courts to force Tesla to make things right.

Earlier this year, Tesla launched its “Full Self-Driving” software in China, but the rollout has been less than stellar.

Shortly after Tesla launched FSD in China, the American automaker had to pause its rollout due to updated requirements from China’s Ministry of Industry and Information Technology (MIIT).

Tesla was forced to change the name of its software package after authorities found it to be misleading.

Owners using FSD racked up thousands of dollars in fines due to FSD making mistakes

Finally, only owners of Tesla vehicles equipped with the HW4 computer (2024-) received the FSD software. Those who paid for FSD with prior vehicles only received limited features, and they are unsurprisingly unhappy.

Chinese blog My Drive reports (translated from Chinese):

One plaintiff revealed to the media that he spent 56,000 yuan in August 2019 to purchase a Tesla FSD feature equipped with HW3.0 hardware. He made the purchase partly because he was a Tesla fan and trusted Musk’s promise of achieving fully autonomous driving within two to three years. He also bought it because the salesperson had insider information about an imminent price increase.

The “insider information” likely refers to Tesla CEO Elon Musk claiming that Tesla’s FSD package price would continue to increase over time as the system gets better.

That turned out to be false. The price of the FSD packaged peaked at $15,000 in 2023 and has since fallen to $8,000:

Tesla is estimated to have over 1 million vehicles equipped with the HW3 computer in China.

Now, seven Tesla owners who purchased the FSD package have filed a lawsuit in the Daxing District People’s Court of Beijing, suing Tesla Motors Sales and Service (Beijing) Co., Ltd. on the grounds of sales contract disputes.

They claim that Tesla is not delivering what it promised, and they are asking to be refunded and be paid damages worth 3 times what they paid, which means Tesla could owe up to 256,000 yuan ($36,000 USD) to each person who purchased FSD, depending on when they bought it.

Electrek’s Take

I have been emphasizing this for a long time, but it is worth repeating: Tesla’s rollout and premature sales of autonomous driving features are a significant liability.

By the time this is all said and done, I believe that Tesla will have paid billions of dollars in reimbursements, settlements, and punitive awards. I wouldn’t be surprised if it’s in the tens of billions.

A good time to be a lawyer.