NZ News
Tesla fans, feeling duped, take the Elon Musk-owned company to court
Tesla owners around the world are taking the company to court, accusing the electric car company of unmet promises.
During the company’s 2026 Quarter 1 earnings call, many car owners’ dreams to sit behind the wheel and let the car drive itself were shattered.
“I wish it were otherwise, but Hardware 3 simply does not have the capability to achieve unsupervised FSD,” Elon Musk, the co-founder and CEO of Tesla, explained in a response. “We did think at one point it would have that.”
FSD stands for full self-drive, a capability Tesla sold to car owners for years with the promise that one day, their car would be able to drive itself.
Benjamin Liu, a Tesla owner in New Zealand who had bought the capability in 2020, is taking his own action.
Liu is a big fan of Tesla, buying his car as early as 2017. He said the owner group was so small then that Tesla could afford to invite all the owners to functions.
“We show up, we have a drink, go on a boat trip, that kind of thing.”
Dr Benjamin Liu is a senior lecturer at the University of Auckland Business School. He specialises in commercial law. Photo: Supplied
He promoted the car to everyone he met and is still a strong believer in what the company is trying to achieve.
He said he has had a great experience with Tesla, but the unmet promise drove him to file a claim with the Disputes Tribunal. A hearing date is set for July.
In 2020, he paid $4800 for Tesla’s FSD. At the time, Musk promised the software would be available soon, and said the earlier you bought, the less you would pay.
Musk’s admission last month totally shattered Liu’s hope.
“I’m not saying this is fraudulent. I’m not saying Tesla or Elon Musk is lying. I’m simply saying what you (Tesla) said is misleading. I was misled. Let’s let the tribunal decide what is fair under the New Zealand law.”
In New Zealand, newer Tesla cars come with a hardware version called Hardware 4 – these cars have the memory space and cameras that allow drivers to use a supervised version of FSD. It allows the car to drive to destinations without the driver’s hands on the steering wheel, but requires the driver to constantly check the road and monitor the car.
Liu’s car is on Hardware 3. But he had a taste of Hardware 4 when he drove Tesla’s loan car as his was getting serviced, and he loved the experience.
His friend also had a car with the function.
“She says ever since she has this full self-driving she’s able to have coffee or do makeup when the car drives her to her office. She says it’s really, really useful. When she goes on a longer trip, again, it’s very stress-free.”
While Musk promised Tesla would build “micro-factories” around the world to update Hardware 3 cars, Liu is not sure when that will be fulfilled and whether it would cost him.
Liu has tried to negotiate with Tesla, who told him they will refund him his 2020 payment of $4800.
But he is not happy with the offer. Buying the function now would cost more than $4800 after Tesla removed the option to buy it outright. The new deal is a subscription costing $159 a month – that $4800 refund would only last Liu 30 months of the service instead of a lifetime.
Plus, he would also need to buy a new car that has Hardware 4.
Liu is a senior lecturer at the University of Auckland. He teaches commercial law and has worked at international law firms. He thinks he has a pretty strong case.
“In terms of Consumer Guarantees Act, I think there’s provisions saying that if you sell a service or product, that should be delivered within a reasonable period of time. And then in terms of the Fair Trading Act, the case against Tesla is even stronger because under the act, a trader like Tesla is not allowed to make misleading representations.
“But in this case, clearly, Elon Musk on behalf of Tesla has made numerous misrepresentations.”
Photo: © Jason Hosking
Liu was not alone. Technology commentator Paul Spain bought his Tesla in 2019 and said he would not have bought the $85,000 car if it was not for the FSD promise.
“It certainly dents your confidence in the company, and whilst I think they’ve been an incredibly innovative company and they’ve really sort of spurned a global uptake in electric vehicles, they do seem to have really oversold the autonomous driving capabilities now over quite a period of time.”
He called on Tesla to make things right.
“They need to make the situation right with those that have made an investment in their technology and kept them in business, and ultimately made the business a very valuable business, because customers like those of us in New Zealand and around the world have bought into the promise of future capabilities.”
A search in the Motor Vehicles Disputes Tribunal showed over the last five years, six case decisions were made where Tesla New Zealand ULC was the respondent, but neither of them are about issues with the FSD.
Consumer NZ CEO Jon Duffy said in a statement that overseas companies selling goods and services in New Zealand were required to comply with our laws.
“However, enforcing the law can be difficult if the company doesn’t have a physical presence here or at least an email address for service.”
He said as Tesla does have a physical presence in New Zealand, resolutions can involve contacting Tesla for a refund, lodging a claim with the Disputes Tribunal or making a report to the Commerce Commission.
Tesla told RNZ it had no comment on the situation.
Source: RNZ
Latest News
Opportunities to mitigate multi-million-dollar RNZ budget blowout likely missed – experts
Multiple opportunities to identify and mitigate a multi-million-dollar budget blowout at RNZ appear have been missed, according to the former executive director at Audit New Zealand.
The public broadcaster on Monday revealed a near $12 million shock financial loss after a litany of financial blunders, which will now lead to sweeping job cuts.
The $11.8m loss is more than 25 times the $470,000 RNZ had expected to lose over the year to June.
CEO Paul Thompson took responsibility for the result, and said internal reports gave an inaccurate picture of the finances, meaning the scale of the loss only became clear in October.
RNZ’s former chief financial officer Hilary Parker resigned unexpectedly in early October.
The board said it would commission an independent review into what went wrong.
Independent contractor Stephen Walker, who left the Audit Office earlier this year, said the size of the loss was surprising, as was the length of time it took to identify it – months after the financial year ended.
Supplied / OAG
“Probably more of a concern is that they had seemingly been unaware that they were running up a significant deficit until they were in the preparation stage of their annual report in October.”
Walker said public entities typically produced monthly financial reports.
An interim audit also took place before the end of the financial year, he said, but if the organisation hadn’t identified significant losses at that stage, the auditor could also be in the dark.
“It seems that there’s a real weakness in forecasting and budgeting that’s occurred here and that the monthly accounts, when they’re produced, either haven’t identified these significant variances against budget or the magnitude of them really hasn’t come to light until right towards the end of the financial year,” Walker said.
“And really at that point, there’s no opportunity for the chief executive, the leadership team to take, and the board to take, any corrective action because the year has effectively been completed.”
Walker said the “significant miss” was difficult to account for given it was more than 10 percent of RNZ’s total funding.
He said based on RNZ’s annual report, financial complexity didn’t appear to be a factor.
“This $11.8m loss isn’t made up of one particular item … it seems to have been contributed to by a number of separate expense lines running over budget. So I don’t think it’s necessarily to do with complexity.”
Among the errors, RNZ wrongly counted $2m from land sales as income in its budget. Staff costs also came in $3.2m over budget, including $1.4m in redundancy payments.
Professor at Auckland University’s business school Norman Wong said based on media reports the issues identified were “significant and troubling”.
Supplied / University of Auckland
“But recognising the sale of land as income in their budget is a basic error that one would have expected to have been caught and corrected well before it got to this point.”
With funding reductions at RNZ over the past two years, Walker expected greater scrutiny of financial results.
“Virtually every public entity has had their annual budget reduced. And so you would expect … the leadership team on a monthly basis and board – I’m not sure how frequently the board will consider the information – but you would expect them to be interrogating the results on a regular basis throughout the year,” he said.
Walker said initiating an independent review was the correct course of action and that he’d want to understand what information the leadership team and the board were regularly receiving.
He said he’d “love to say” surprising financial results were rare, but conceded they occured on a semi-frequent basis during his time leading the Audit Office.
“The benefit of independent scrutiny by the Audit Office – and the auditors providing that support to the Auditor General – [is] that the reporting is fairly presented at the end of the year, whether it’s good, bad or ugly.”
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