💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Tesla to clarify how customers may disclose problems

Published 06/10/2016, 10:01 PM
© Reuters. A Tesla logo hang on a building outside of a Tesla dealership in New York
TSLA
-

By David Shepardson

WASHINGTON (Reuters) - Tesla Motors Inc (NASDAQ:TSLA) on Friday revised a nondisclosure clause in its customer repair agreements after a U.S. regulator took issue with the practice, while the electric carmaker's chief executive separately called most customer reports of suspension problems in its Model S sedan fraudulent.

Tesla CEO Elon Musk went on the offensive on social media, saying in a tweet that 37 of 40 suspension complaints filed with the U.S. National Highway Traffic Safety Administration were fraudulent. "Would seem to indicate that one or more people sought to create the false impression of a safety issue where none existed," he wrote.

The NHTSA would only say that the company was cooperating fully with its review and that no suspension problems had been found "to date." Musk said the complaints were "fraudulent" because a "false location or vehicle identification numbers were used."

Reuters reported Thursday that anonymous individuals have filed a number of complaints of suspension problems on NHTSA's website, citing salvaged Tesla vehicles.

NHTSA spokesman Bryan Thomas said Tesla was cooperating "and NHTSA’s examination of the data is under way. To date, NHTSA has not identified any safety issue with Tesla’s suspensions."

He declined to comment on Musk's assessment of the complaints. On Thursday, NHTSA had criticized Tesla for entering into a "troublesome nondisclosure agreement" with a Model S owner with a suspension problem.

On Friday, NHTSA said "Tesla has clarified the language ... in a satisfactory way, resolving the issue" of the nondisclosure agreements..

Alexis Georgeson, a spokeswoman for the California-based green car maker, confirmed the change.

NHTSA said Thursday it was reviewing reports of suspension problems, but had not opened a formal investigation.

Tesla has denied any suspension problems, saying extensive durability testing and review of customer issues "gives us high confidence in our suspensions."

The possible safety defect in the Tesla Model S was reported on earlier this week by the auto-oriented website Daily Kanban, which cited owner complaints. The website linked to a Model S owner who wrote on a Tesla fan website that he had suspension problems and had received an email from an NHTSA investigator.

The owner said Tesla agreed to pay 50 percent of a $3,100 repair bill if the owner agreed to keep the arrangement confidential.

Tesla said Thursday the car with over 70,000 miles had abnormal rust and that the Pennsylvania owner lived down such a long dirt road that it required two tow trucks to retrieve the car. The owner said the car had only been on a dirt road once or twice, and Musk later conceded to the Wall Street Journal that Tesla had erred in saying the owner lived on a dirt road.

NHTSA Administrator Mark Rosekind said on Thursday that the agency was reviewing the nondisclosure agreements to see if they had impeded owners from making complaints.

Tesla said in a blog post late on Thursday that it "has never and would never ask a customer to sign a document to prevent them from talking to NHTSA or any other government agency." But the company said it often requires customers to sign a "goodwill agreement" with a nondisclosure clause when the company agrees to cover or discount repairs even if it is not responsible.

Tesla noted the agreement did not mention NHTSA, and said it did not intend to stop customers from communicating problems to the agency.

© Reuters. A Tesla logo hang on a building outside of a Tesla dealership in New York

NHTSA said on Thursday it "learned of Tesla’s troublesome non-disclosure agreement last month. The agency immediately informed Tesla that any language implying that consumers should not contact the agency regarding safety concerns is unacceptable."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.