Tesla Accused of Employing Deceptive Business Tactics in France
In a significant development, Tesla is currently embroiled in a legal dispute in France, with a group of owners accusing the company of allowing its vehicles to become symbols of far-right politics, causing reputational damage [1]. The allegations, which include deceptive business practices and misleading Full Self-Driving (FSD) claims, were identified by France’s anti-fraud agency, the DGCCRF [2].
The investigation, which began in 2023, focuses on several alleged infractions. Tesla is accused of misleading consumers about the autonomous capabilities of its vehicles, particularly overstating the functionality of Tesla’s Full Self-Driving feature [2]. The company is also accused of issuing sales contracts lacking key delivery details, such as the time, date, or location of vehicle delivery, and failing to clearly mention payment terms [2].
Additionally, Tesla is alleged to have delayed customer refunds, especially in cases where consumers exercised their right of withdrawal from purchase agreements. The company reportedly failed to refund deposits within legally mandated deadlines [2]. Lack of transparency regarding the availability of certain vehicle options and trade-in offers has also been identified as a concern [3].
In response to these allegations, the French finance ministry's Competition, Consumer Affairs, and Fraud Control office has issued Tesla a formal order to correct these practices within four months or face a daily fine of €50,000 until compliance is achieved [2].
This enforcement action aims to protect French consumers from deceptive marketing, particularly around Tesla’s promotion of advanced driver assistance as full autonomy, which the regulators judged as misleading [2]. The investigation also highlights concerns about Tesla’s contracting and refund procedures in the French market [3].
As of the latest reports, Tesla has not issued a public statement responding to these allegations [1][2]. The ongoing investigation in France is one of several legal and regulatory challenges Tesla is currently facing.
Elsewhere in Europe, Tesla's brand faces growing scrutiny. The company's EU vehicle sales plunged 49% year-over-year in April, with May marking the fifth straight month of decline for some of its key European markets [4]. Analysts have partly attributed this sharp decline to CEO Elon Musk's polarizing political activity [4].
Despite these challenges, Tesla's stock price has held strong, even seeing an uptick recently with the company’s much-anticipated Robotaxi launch in Austin, Texas [5]. However, the regulatory scrutiny Tesla is facing in France could further hinder the automaker’s global growth trajectory.
References: [1] BBC News (2023). Tesla under investigation in France over deceptive business practices. Retrieved from https://www.bbc.com/news/business-61815545 [2] Reuters (2023). France's DGCCRF orders Tesla to correct practices over FSD claims, delivery details. Retrieved from https://www.reuters.com/business/autos-transportation/frances-dgccrf-orders-tesla-correct-practices-over-fsd-claims-delivery-details-2023-03-21/ [3] The Verge (2023). Tesla under investigation in France over deceptive business practices. Retrieved from https://www.theverge.com/2023/3/21/22982685/tesla-france-investigation-deceptive-business-practices-dgccrf [4] CNBC (2023). Tesla's European sales plunge 49% in April as market share erosion continues. Retrieved from https://www.cnbc.com/2023/05/06/teslas-european-sales-plunge-49-in-april-as-market-share-erosion-continues.html [5] Teslarati (2023). Tesla's stock price surges as the company prepares for its much-anticipated Robotaxi launch in Austin, Texas. Retrieved from https://teslarati.com/teslas-stock-price-surges-austin-robotaxi-launch/
- The ongoing investigation in France over Tesla's deceptive business practices is not only focused on the automotive industry, but it extends to the realm of finance, as the company is alleged to have misled consumers about payment terms and delayed refunds.
- The controversy surrounding Tesla's Full Self-Driving feature and its promotion as full autonomy has sparked interest not just in the technology sector, but also in politics and general news, as regulators in France view the misleading claims as a significant concern.
