A group of Chinese vehicle owners has taken the electric vehicle giant to court, alleging consumer fraud and deceptive advertising regarding the automaker’s heavily marketed Full Self-Driving (FSD) software.
The lawsuit, which was recently heard before the Daxing District People’s Court in Beijing, involves 10 Tesla owners who purchased their vehicles between 2019 and 2021. The plaintiffs are collectively seeking over RMB 3.95 million (approximately $583,000 USD) in refunds and statutory damages.
The lawsuit centers on the massive gulf between Tesla’s ambitious marketing language and the current reality of its software capabilities on Chinese roads. Buyers who paid between RMB 56,000 and RMB 64,000 for the premium FSD package claim they were led to believe true autonomous driving was imminent.
Instead, the plaintiffs argue the feature has only ever been deployed in China as a localized, hands on system. According to court filings, the plaintiffs allege that Tesla, “promoted a fully autonomous feature while providing a product that functions more as Intelligent Driving Assistance.”
Furthermore, the vehicle owners argue that Tesla was fully aware the software lacked the necessary green light from domestic authorities. The lawsuit states that the company, “engaged in misleading promotion and concealed hardware limitations, despite knowing that its advertised ‘Full Self Driving’ capability had not been approved by Chinese regulators and could not deliver core functionalities”.
A major technical sticking point for the plaintiffs is hardware obsolescence. While newer Tesla models feature updated “Hardware 4” (HW4) configurations, older vehicles stuck on “Hardware 3” (HW3) lack the computing power required for the advanced features originally promised. Owners claim they were assured by sales representatives that the rollout was coming “very soon.”
Under China’s robust consumer protection laws, businesses found guilty of fraudulent practices can be penalized with punitive financial multipliers.
The FSD Package, Nine of the plaintiffs are demanding a complete refund of the software package plus an additional three times the purchase price in compensation.
The Entire Vehicle, The tenth plaintiff is taking the financial demand a step further, seeking a full refund plus triple damages for the entire cost of the vehicle, arguing that the promise of true self driving capabilities was the single, deciding factor in buying the car.
Tesla has vigorously pushed back against the allegations in court. Rather than conceding that the software has failed to manifest, Tesla’s legal team contends that the technology is an ongoing, evolving product rollout.
During the court proceedings, Tesla representatives argued that the FSD functionality has now been “implemented’ or partially implemented, with additional features still under development.”
This legal battle in Beijing is far from an isolated incident. Tesla faces similar class action lawsuits, regulatory investigations, and consumer arbitration battles in the United States, Europe, and Australia. Just recently, individual small claims victories in western markets have forced Tesla to issue software refunds to disgruntled buyers, establishing a messy legal precedent.
The stakes in China, however, are uniquely high. Tesla is currently locked in a brutal price and technology war with highly sophisticated local EV competitors like BYD, NIO, and XPeng all of whom are aggressively deploying their own advanced driver assistance systems. While a $583,000 lawsuit is a rounding error on Tesla’s balance sheet, an adverse ruling by the Beijing court could open the floodgates for thousands of similar claims across mainland China.
