Tesla is in trouble again

Tesla is facing a class-action lawsuit filed in China by owners of vehicles manufactured between 2019 and 2023 equipped with HW3 hardware. The lawsuit alleges the company failed to deliver on promises made regarding its “Full Self-Driving” (FSD) software. The owners are demanding a refund and triple damages.

Tesla Faces New Lawsuit

The company had previously claimed that all vehicles it produced since 2016 were fully autonomous and sold the FSD package. However, Tesla later admitted that HW3-equipped vehicles would not support Level 4-5 autonomous driving.

This situation has fueled outrage from users in both the US and China. While CEO Elon Musk has stated that HW3 hardware can be upgraded, incompatibilities with existing HW4 hardware and billions of dollars in cost are hindering this plan.

Tesla launched FSD in China this year, but the process has been problematic. Distribution has been halted due to regulations by China’s Ministry of Industry and Information Technology (MIIT). Some users have faced steep traffic fines due to FSD’s misjudgments. Currently, only owners of HW4-equipped vehicles manufactured after 2024 have access to the full FSD software.

It is estimated that there are approximately 1 million HW3-equipped Tesla vehicles in China. This lawsuit, initiated by seven Tesla owners, alleges breach of sales contract. The plaintiffs are seeking the return of the 56,000 yuan (approximately $7,700) they paid and compensation of up to 256,000 yuan (approximately $36,000) per person.

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