PARIS – French authorities have issued a stern warning to Tesla, demanding compliance with consumer protection laws within four months or face daily fines for deceptive business practices.
Immediate Impact
The French Ministry of the Economy has found Tesla in violation of several laws concerning “deceptive business practices.” The Directorate-General for Competition, Consumer Affairs and Fraud Prevention (DGCCRF) has ordered Tesla to rectify these issues or incur fines of 50,000 euros ($58,000 USD) per day.
Key Details Emerge
The investigation, initiated in 2023 following numerous consumer complaints via France’s SignalConso service, concluded with authorities identifying multiple violations by Tesla. These include incomplete sales contracts, misleading claims about vehicle capabilities, and failures in refund processes.
- Sales contracts lacking delivery dates and credit payment options.
- Payments demanded before the withdrawal period for credit-financed purchases.
- Absence of valid receipts for partial cash payments.
- Misleading claims about Tesla’s Full Self-Driving (FSD) capabilities.
- Delayed refunds for canceled orders.
- Insufficient delivery information provided to consumers.
Industry Response
The announcement comes as Tesla faces growing scrutiny over its autonomous driving claims. French authorities have specifically criticized Tesla for misleading customers about the FSD capabilities, which remain unavailable in France despite being marketed as fully autonomous.
“Tesla has sold FSD software for various prices, up to $15,000, yet it functions as a ‘level 2’ driver assist requiring active human intervention,” notes the DGCCRF report.
By the Numbers
Despite Tesla’s global influence, the potential fines could significantly impact its operations in France. At a current sales rate of a few thousand cars per quarter, the fines could effectively negate Tesla’s profits from the region.
“A fine of $5 million per quarter would essentially eliminate any profits Tesla makes from France,” analysts suggest, highlighting the financial implications of non-compliance.
What Comes Next
France’s ultimatum to Tesla underscores a broader European push for stricter consumer protection enforcement. French authorities have set a precedent that could influence regulatory actions across the continent.
Meanwhile, Tesla is also contending with a lawsuit from French owners seeking to terminate their leases, citing CEO Elon Musk’s controversial political activities as damaging to the brand’s image.
Background Context
Since 2015, Tesla has marketed various forms of partial automation, beginning with Autopilot and evolving into the more advanced FSD. However, the software’s capabilities have consistently fallen short of full autonomy, a fact that has not gone unnoticed by regulators.
“Tesla’s promises of vehicles as appreciating assets and autonomous taxis have yet to materialize, leaving customers and regulators alike questioning the company’s claims,” industry experts observe.
Expert Analysis
Experts argue that Tesla’s challenges in France reflect broader issues within the company’s business model. The reliance on direct sales and a streamlined ordering process has led to gaps in customer service and regulatory compliance.
“While Tesla has revolutionized the automotive industry, its approach to consumer relations and regulatory adherence remains a significant hurdle,” one analyst notes.
Regional Implications
The timing is particularly significant as Europe tightens regulatory frameworks around autonomous vehicles. Tesla’s situation in France could serve as a catalyst for similar actions in other countries, potentially reshaping the landscape for electric vehicle manufacturers.
As the four-month deadline approaches, all eyes will be on Tesla’s response and the potential ripple effects across the automotive industry.