A Beijing court held its first hearing in a consumer fraud lawsuit against Tesla over its 'Full Self-Driving' software, with 10 owners seeking more than 3.95 million yuan ($583,000) in damages. The case marks China's first collective legal challenge targeting Tesla's FSD promises. This development comes as Tesla is facing growing global scrutiny over its self-driving claims. With the lawsuit, the company's reputation and financials are under intense scrutiny.
The plaintiffs each paid 56,000 yuan (~$7,800) for Tesla's FSD package between 2019 and 2021. They allege that Tesla sales staff and CEO Elon Musk assured them 'full self-driving' capability was imminent and that the price would increase — motivating them to buy. However, when Tesla began rolling out its driving assistance software in China last year, it only supported vehicles equipped with HW4.0 hardware.
The plaintiffs argue that Tesla's FSD system has not received regulatory approval in China, cannot perform the functions promoted in its marketing, and that the company concealed hardware limitations in order to sell vehicles. This raises serious questions about the company's transparency and accountability in its sales practices.
Under China's Consumer Rights Protection Law, the owners are seeking full refunds plus triple damages — the standard penalty for consumer fraud in the country. The lawsuit also highlights the need for clearer regulations on autonomous driving claims, which have become a major selling point for many car manufacturers.
Tesla disputed the allegations during the hearing, claiming some FSD functions are 'fully operational' while others are 'partially functional' or still under development. However, this explanation does little to address the concerns of the plaintiffs and may further erode trust in Tesla's self-driving technology.
The hearing comes at a particularly awkward moment for Tesla's China autonomy strategy. Just nine days ago, Tesla confirmed that FSD (Supervised) is now available in China. And just a week ago, the company renamed its system 'Tesla Assisted Driving' in the Chinese market — a tacit admission that the 'Full Self-Driving' branding was misleading.
The renaming is unlikely to help Tesla's legal defense, since the plaintiffs purchased FSD under the original branding and were specifically told the system would achieve autonomous driving. This case could set a precedent affecting a massive number of owners in China, with an estimated 1 million vehicles equipped with the HW3 computer.
Tesla is facing up to $14.5 billion in lawsuits worldwide, many of them related to Autopilot and FSD. In the US, a class action over misleading FSD claims is proceeding, and a Texas owner recently won a $10,000 judgment against Tesla for failing to deliver on FSD promises — with Tesla still fighting the ruling.
The lawsuit also underscores the importance of regulatory oversight in the autonomous driving industry. As companies like Tesla push the boundaries of self-driving technology, it is essential that consumers are protected from misleading claims and that manufacturers are held accountable for their promises.
The case highlights the need for stricter regulations on autonomous driving claims.
