Tesla's $100,000 EV refund due to defects

Home > Industry Analysis > Content

【Summary】Tesla New Zealand has been ordered to refund a customer for a faulty Tesla Model 3 Performance. The vehicle had a recurring wheel alignment issue, with multiple attempts to fix it. The customer rejected the vehicle, but Tesla denied any faults. However, an independent test drive confirmed the issue, leading to the tribunal ruling in favor of the customer. Tesla must refund the purchase price and cover finance obligations, totaling $22,112.82.

FutureCar Staff Aug 25, 2023 4:54 PM PT

Tesla's $100,000 EV refund due to defects

The Tesla Model 3 was once the most popular new EV in New Zealand, but it was overtaken by its Model Y sibling last year.

In a recent legal battle, a Tesla owner based in Waikato won a case against Tesla New Zealand. The Motor Vehicles Disputes Tribunal ruled that the owner should receive a full refund for a mechanically defective vehicle.

The vehicle in question was a new Tesla Model 3 Performance that cost $104,643. Over a period of nine months, the owner had to bring the car in for six wheel alignment assessments due to a recurring issue. In one visit, repairs were even made to the car's subframe.

Initially, Tesla denied that the vehicle had any underlying faults. However, the tribunal adjudicator, Brett Carter, determined that the car did not meet the threshold of "acceptable quality." As a result, Tesla is required to take back the vehicle, assume the customer's obligations with their finance company, and reimburse the customer's deposit and finance repayments, totaling $22,112.82.

Shaun Baker, the owner of the Tesla, purchased the vehicle in August 2022 for $104,643. On the day of collection, Baker noticed that the car would pull to the right while driving.

He immediately returned the car to Tesla, who assessed and serviced it at their Auckland service center. The assessors confirmed the issue and performed a wheel alignment to correct it.

However, according to tribunal documents, Baker reported that the problem was not fixed. In November 2022, he returned to Tesla for another assessment.

Tesla staff once again adjusted the wheel alignment, but further issues arose later that month. Baker had to bring the car back to Tesla, and although the wheel alignment measurements were within specification, improvements were still needed.

A more significant repair was carried out, involving an adjustment to the car's front subframe to make the wheelbase left/right identical. Tesla believed that this fixed the problem.

Unfortunately, Baker continued to experience the issue. In February of this year, a Tesla mobile mechanic confirmed that the car's rear toe was outside of specification.

Despite attempts to fix the problem, Baker took the car to a third-party group for a separate assessment. They found that the car drifted to the right even with a level steering wheel, requiring constant pressure on the left side of the steering wheel to keep the car straight.

Baker then emailed Tesla New Zealand to reject the vehicle, stating that the problem had not been resolved. However, Tesla denied the rejection claims and stated that no faults were found with the vehicle.

After a post-hearing test drive by an independent party and another vehicle alignment report, it was determined that the car still steered to the right on flat road surfaces. The tribunal's assessor also concluded that there was no chronic or abnormal wheel alignment problem with the car.