File photo/Zhang Xiaoqing (NBD)

Mar. 11 (NBD) -- Chinese regulators announced Tuesday that it had made inquiries to Tesla China over the downgraded configuration in vehicles and asked the company to keep its vehicles consistent.

The electric car maker was recently thrown under fire because of the downgraded chips installed in both made-in-China and imported Model 3s. 

While some car owners are threatening to bring to court, some are demanding refund and compensation.

Nie Ying, a lawyer at Tahota Law Firm, remarked that if buyers can prove the inconsistency between the delivered vehicles and what is advertised, they can, as per the contract, replace/return the products and ask for remedy. 

Musk's tweet fuels anger

On March 3, some buyers complained on China's Twitter-like Weibo that the control units in their Model 3s are actually running on HW2.5 chips but the vehicles are marked with "HW3.0 chips" on the specification sheets.

Tesla China responded on the same day that the inconsistency was due to supply chain shortages caused by the coronavirus outbreak, and it would provide free upgrades to made-in-China Model 3s once the production recovers.

But the discontent did not fade away. Tesla's CEO Elon Musk tweeted on March 5 that the customers who complained hadn't ordered Full Self-Driving (FSD).

"Perhaps they weren't aware that the computer is upgraded for free if the FSD option is ordered even after delivery," he said. Some denounced that the tweet was "arrogant" and "didn't show any sign of apology”.

FSD refers to a premium function that would cost about 8,000 U.S. dollars more than a standard Model 3.

However, when contacted by National Business Daily (NBD), Tesla China's customer service division said free upgrades would be offered for all made-in-China Model 3s, no matter whether the FSD option is ordered or not.

Made-in-China Model 3 buyers demand refund & compensation

Finding free upgrade unsatisfying, some buyers of the locally-made Model 3s are requiring refund and a further triple compensation.

"What is important now is not the free upgrade but Tesla's playing foul with customers as it quietly changed the chips," a car owner surnamed Zhang told NBD.

Several buyers said to NBD that they would accept to take HW2.5 as a transition if they were informed by Tesla. "I can understand the undersupply issue amid the epidemic. What we care is not the hardware, but Tesla's act of deceiving its customers," Zhang added.

"If buyers have sufficient proof that the actual vehicles are inconsistent with those in the advertisement, they could, based on the contract, replace and return the products, as well as ask for compensations and remedies for breach of contract," said Nie Ying.

File photo/Hua Ang (NBD)

If HW3.0 is specified in the contract, the actual installation of HW2.5 would be a breach of contract, Nie added.

It's noteworthy that the delivery of Model 3 has not been affected. But the new buyers have to sign a document which writes "upgrade to HW3.0 after delivery", NBD noticed.

However, several buyers confessed to NBD that they decided to pick up the new vehicles after the "downgraded chip" issue was settled.

Owners of imported Model 3s plan to sue

Owners of the imported Model 3s also found the same inconsistency. 

"Tesla only promised to provide hardware upgrades to made-in-China Model 3s and ignored our requests," complained an owner of imported Model 3.

In several WeChat groups for protecting the rights of imported Model 3 buyers, NBD found that most buyers haven't been told about the hardware inconsistency and were guaranteed by the salespersons that the vehicles are equipped with HW3.0 chips.

"Salespersons should inform consumers of the real information of the products," warned Du Manqing, a lawyer at Guangdong KingBridge Law Firm, in an interview with NBD. It was obviously unfair to customers of both made-in-China and imported Model 3s if Tesla didn't specify the chip type, Du added.

When reached by NBD, Tesla China's customer service division responded that they haven't received any notice from its headquarters to offer hardware upgrades for imported models.

Over 30 owners of imported Model 3s reached agreement to file lawsuit against Tesla and the number was increasing, said Wang Yu (alias), a car owner himself, in an interview with NBD. "Our only demand is to upgrade the chip," said Wang.

Email: gaohan@nbd.com.cn