Tesla grants Model 3 owner free FSD computer upgrade by missing small claims court hearing on 'false advertising'

Tesla upped the price of its Full Self-Driving Beta (FSD) feature to US$15,000 not long ago, but has also had a US$199/month subscription model since last year to soothe the significant initial outlay. In order to benefit from the latest FSD option however, owners have to have the latest Hardware 3.0 computer installed which many cars don’t have, so Tesla promised to swap the computers of cars made after 2016 for free, so that their owners can take advantage of the FSD package.

That free upgrade, however, turns into a paid one for those who opt for the subscription model instead of buying the FSD package outright. Tesla asked them for US$1,500 to swap their old computer with the Hardware 3.0 silicon, while later it lowered the price of the upgrade to US$1,000. That’s still a long way from the 2016 promise of free, though, so one Model 3 owner took Tesla to a small claims court in Washington and just won the case, with the judge citing “false advertising” on Tesla’s part as one of the arguments for ruling in Ian Jordan’s favor.

"Furthermore, Plaintiff purchased a second Tesla Model 3, relying on advertisement from the company that all Tesla 3 models come with all the necessary hardware for self-driving. Defendant learned that, in fact, installing the self-driving function would cost $1,106 in further hardware upgrades in violation of Tesla’s false advertising," concluded the judge.

Judge Matthew A. Skau also ruled for Jordan in his other small claims case that wanted compensation for a failed media computer in his other Model 3. Instead of fixing it under warranty, Tesla simply asked Jordan to do a paid upgrade to the next, MCU2 generation, which resulted in a loss of his AM radio, as the second generation doesn’t carry one.

Tesla lost the case by virtue of not showing up, apparently deciding that legitimizing the claim is not worth it, and the Judge ordered it to pay US$1,106 for the FSD computer upgrade so that the Model 3 owner can subscribe to the monthly fee scheme. Tesla also has to pay US$1657.50 to Jordan for the undesired MCU2 media computer upgrade in his other vehicle as a breach of warranty, as well as US$500 in compensation for the loss of AM radio that resulted from the upgrade.

Tesla paid what the court ordered right away, yet it is also facing a false Autopilot advertising federal case, while last week it wanted Jordan's lawsuit outright dismissed with the argument that "mere failure to realize a long-term, aspirational goal is not fraud," so it tried to hammer the point home by not showing up at all and automatically lost the case.

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