US electric vehicle maker Tesla is facing at least eight civil lawsuits by Chinese individuals and two possible class-action lawsuit over “disputes in sales contracts,” according to information released recently on the Shanghai city court system.
Why it matters: Only five months after delivering its China-made Model 3 vehicles, Tesla has drawn growing criticism that has turned into lawsuits due to lack of transparency, too-often price changes, and alleged deceptive sales pitches.
Details: A local court in Shanghai Pudong New Area will hear eight civil lawsuits filed by eight different individuals against Tesla Motors Sales Service (Shanghai) Co., Ltd., a fully-owned subsidiary by the US EV giant in a month starting May 19.
- Meanwhile, two local small enterprises with businesses in sales of electronic devices have filed civil lawsuits against Tesla China sales operation separately due to issues in “sales contracts.”
- One of the plaintiffs said it is a “class action lawsuit” without giving further details, when contacted by TechNode on Friday.
- Tesla did not respond to a request for comment.
- The claimed class action lawsuit probably relates to “price reduction” in Tesla’s made-in-China Model 3 vehicles, Chinese media reported citing a company representative of the plaintiff.
- Early last month, a female customer surnamed Zhang complained that she was not informed of the upcoming price cut and therefore ended up paying RMB 30,000 ($4,300) more for her new car.
- Zhang said the salesperson promised no price cuts in the near future when she finished the payment early April. However, two weeks after the purchase, Tesla on May 1 announced a 10% price cut in locally-built Model 3 with the after-subsidy price of the cheapest version reduced from RMB 303,550 to RMB 271,550.
- Tesla’s recent cut price was supposed to meet the latest government requirements for EV subsidies. It came just one week after the company raised the prices by around RMB 5,000 to maintain its margin level, since each Model 3 vehicle is now qualified for fewer subsidies under the new incentive scheme.
Context: More legal complaints are probably on the way facing Tesla. More than 600 consumers have collectively expressed their fury against the company last month as its salespersons allegedly pressured them to buy the entry-level Model 3 while hiding the release date of more competitive long range version, with delivery expected to start in June.
- Speaking with TechNode on Monday, a Tesla owner surnamed Fu said a number of Tesla owners are planning to file lawsuits against the company, as it has not yet provided any satisfactory solutions.