Tesla refunds payment plus interest to Model 3 owner to settle false FSD advertising claim out of court

Tesla recently lowered the price of its Full Self-Driving Beta option to US$12,000 as its autonomous driving software keeps staying in regulatory crosshairs, despite that the automaker recently won an Autopilot-related case which ruled one fatal accident a driver error. There are still a number of ongoing Autopilot and FSD lawsuits, though, as well as federal investigations, including for California's DMV and AG office claims that Tesla misled the public with the description of its driver-assist option features.

In at least one such lawsuit, Tesla has offered a Model 3 owner to settle his claim out of court. The claimant refused to sign Tesla's typical non-disclosure agreements and lived to tell all about the settlement case. Apparently, he took delivery of his Model 3 in the UK on 06/20/2019 after paying £5800 extra for the Full Self-Driving Beta option that was available for his car.

At the time, Tesla's website promised that FSD features like "automatic driving on city streets" or "recognize and respond to traffic lights and stop signs" will be coming by year's end with a software update. Not only didn't autonomous city driving materialize, but owners outside of the US still can't get FSD functions due to local regulations, rendering the expensive option a glorified driver-assist software like Autopilot.

The Model 3 owner then filed a lawsuit demanding compensation for the false FSD advertising and forced Tesla, whose lawyers apparently didn't expect him to go through with his claims, offer a settlement a few weeks before the trial. He only wanted to set a precedent, so he agreed on an FSD payment refund plus interest, but insisted on the removal of the confidentiality clause:

This led to them removing the two clauses, and we then proceeded to sign the settlement, they asked for my bank details and then made payment/removed FSD from my car. By way of commentary, I think my claim was an absolute slam-dunk from a legal POV. Their defence had set out they intend to deliver city street driving in the future; therefore they hadn't delivered it by the end of 2019 which was what their website claimed they would do. The website was the description used to sell the car, and so the website formed part of the contract - very clear breach of contract. From Telsa's POV, I am the worst type of litigator to take on. I am not a lawyer, but deal with them quite often in my day job so I know enough to put in a small claims action with confidence. The money wasn't important to me, I felt they'd conned me and I wanted them to do the right thing and put it right. Moreover, because the money wasn't important to me I was never going to sign up to a non-advice/confidentiality clause, I think it's important that my experience is out there for others to form their own views from.

Tesla subsequently yanked the useless but paid-for Full Self-Driving Beta feature from Ed Butler's 2019 Model 3 vehicle, perhaps setting a precedent for similar claims in the future now that his settlement solution is out in the open.

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