Tesla Woes: Company Issues Recall and is Hit With Lawsuit

On April 20, Tesla’s image suffered a double whammy. The electric vehicle manufacturer issued a voluntary recall for 53,000 Model S sedans and Model X SUVs produced between February and October 2016, due to an issue with electric parking brakes that could prevent the brake from releasing. Tesla stated that the brakes, produced by third-party manufacturer Brembo, would not pose a safety issue. They would prevent the car from moving, rather than fail and cause a stationary vehicle to roll away. The scale of the recall – while high relative to Tesla’s total production numbers – still pales in comparison with much larger recalls such as the hundreds of thousands of cars recalled by multiple manufacturers due to faulty Takata airbags.

The timing, however, was not ideal, as the news broke on the same day as news of a class-action lawsuit filed against rhe company. The suit alleges that Enhanced Autopilot is “essentially unusable and demonstrably dangerous.” The suit goes onto state that, “Unwittingly, buyers of affected vehicles have become beta testers of half-baked software that renders Tesla vehicles dangerous if engaged.”

Steve Berman, managing partner of Hagens Berman, which represents the plaintiffs, said,

“Tesla has endangered the lives of tens of thousands of Tesla owners across the country, and induced them to pay many thousands of dollars for a product that Tesla has not effectively designed. Tesla sold these vehicles as the safest sedan on the road. What consumers received were cars without standard safety enhancements featured by cars costing less than half the price of a new Tesla, and a purported ‘Enhanced Autopilot’ that operates in an erratic and dangerous manner.”

Tesla has pushed back on these allegations, calling them “disingenous,” “inaccurate,” and “sensationalistic.” Their full statement to Business Insider is below:

“This lawsuit is a disingenuous attempt to secure attorney’s fees posing as a legitimate legal action, which is evidenced by the fact that the suit misrepresents many facts. Many of the features this suit claims are ‘unavailable’ are in fact available, with more updates coming every month. We have always been transparent about the fact that Enhanced Autopilot software is a product that would roll out incrementally over time, and that features would continue to be introduced as validation is completed, subject to regulatory approval. Furthermore, we have never claimed our vehicles already have functional ‘full self-driving capability,’ as our website has stated in plain English for all potential customers that ‘it is not possible to know exactly when each element of the functionality described above will be available, as this is highly dependent on local regulatory approval.’ The inaccurate and sensationalistic view of our technology put forth by this group is exactly the kind of misinformation that threatens to harm consumer safety.”

These issues highlight the challenges Tesla, and any insurgent company in the hard-to-penetrate automotive market, faces. Tesla’s arguably groundbreaking self-driving tech also elicits strong responses from the public and from safety advocates. The company also faces the prospect of strong competition from legacy carmakers, such as General Motors’ Chevrolet Bolt, meant to compete directly with Tesla’s upcoming Model 3. The Model 3 itself, Tesla’s first mainstream EV, will prove to be a test of whether the company can expand its approach and strategy to a mass-produced automobile, while still meeting the production demands it will face.

Photo credit: Tesla Press Kit, owner/uploader: Alexis Georgeson.

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