A Beijing court has held the first hearing in what is shaping up to be a landmark consumer fraud lawsuit against Tesla over its Full Self-Driving software, with ten plaintiffs seeking more than 3.95 million yuan (approximately $583,000) in damages. The case, initially filed last September with seven owners, has now expanded to ten and represents China’s first collective legal challenge targeting the automaker’s FSD promises. The plaintiffs allege that Tesla sold them a product that does not perform as advertised and that the company concealed critical hardware limitations to close sales.
What the Plaintiffs Allege in the FSD Fraud Lawsuit Against Tesla
Each of the ten plaintiffs paid 56,000 yuan, or roughly $7,800, for Tesla’s Full Self-Driving package between 2019 and 2021. According to a report from The Beijing News, the owners claim that Tesla sales staff and CEO Elon Musk repeatedly assured them that full self-driving capability was imminent and that the price would increase, creating urgency to purchase. The crux of the fraud allegation is that these representations were materially false when made.
The reality that unfolded was starkly different. When Tesla began rolling out its advanced driving assistance software in China this year, the system only supported vehicles equipped with the HW4.0 hardware platform. Owners of older HW3.0 vehicles, which includes essentially all cars produced between 2019 and 2023, were excluded from accessing the features they had paid for. The plaintiffs further argue that Tesla’s FSD system has not received regulatory approval in China and cannot perform the functions promoted in its marketing materials.
Under China’s Consumer Rights Protection Law, the owners are seeking full refunds plus triple damages, the standard penalty for consumer fraud in the country. During the hearing, Tesla disputed the allegations, claiming that some FSD functions are fully operational while others are partially functional or still under development. The company did not concede that its marketing was misleading.
Why the Timing of This Lawsuit Is Particularly Damaging for Tesla
The hearing arrives at an especially awkward moment for Tesla’s autonomy strategy in China. Just nine days before the hearing, Tesla confirmed that FSD (Supervised) is now available in the Chinese market. And only a week ago, the company renamed its system Tesla Assisted Driving in China, a tacit admission that the original Full Self-Driving branding was misleading. This renaming is unlikely to help Tesla’s legal defense, since the plaintiffs purchased the software under the original branding and were specifically told the system would achieve autonomous driving.
What is the significance of Tesla renaming FSD to Tesla Assisted Driving in China?
The renaming of FSD to Tesla Assisted Driving in China represents an implicit acknowledgment that the original Full Self-Driving label overstated the system’s capabilities. For the plaintiffs in this fraud lawsuit, the name change effectively supports their core argument: that the product was marketed as something it was not. Legal experts note that a company rarely rebrands a product unless it recognizes a fundamental disconnect between the product’s name and its actual functionality.
The Global Legal Exposure Over Self-Driving Claims
This Chinese case is far from an isolated incident. Tesla is facing up to $14.5 billion in lawsuits worldwide, many of them related to Autopilot and Full Self-Driving. In the United States, a class action lawsuit over misleading FSD claims is proceeding, and a Texas owner recently won a $10,000 judgment against Tesla for failing to deliver on FSD promises, a ruling that Tesla is still fighting. The pattern across jurisdictions is consistent: Tesla sold a product called Full Self-Driving for thousands of dollars, its CEO repeatedly promised the capability was imminent, and that capability still does not exist as advertised.
The Chinese lawsuit carries particularly high stakes because of the scale involved. Tesla is estimated to have over one million vehicles equipped with the HW3 computer in China. If the court sides with the plaintiffs and applies the triple damages provision under Chinese consumer protection law, Tesla’s financial exposure could run into billions of dollars. Hundreds of additional owners are reportedly consulting lawyers about filing their own claims, suggesting that this case could set a precedent affecting a massive number of consumers.
The Core Problem at the Heart of Tesla’s FSD Liability
The fundamental issue remains the same in every jurisdiction where Tesla has sold the Full Self-Driving package. The company sold a product with an unequivocal name, its CEO repeatedly assured customers that full autonomy was just around the corner, and years later the system still requires constant supervision and cannot operate without a human driver ready to intervene. Renaming the software to Tesla Assisted Driving in China is essentially an admission that the original name was misleading, which is exactly what the plaintiffs in this case are arguing in court.
The triple damages provision under Chinese consumer law makes this case particularly significant. If the court finds Tesla liable for fraud, the company does not simply owe refunds but three times what owners paid. Scaled across the more than one million HW3 vehicles in China, the potential liability is staggering. No ruling timeline was disclosed, but the outcome of this case could reshape how automakers market advanced driver assistance systems in one of the world’s largest automotive markets.
The hearing in Beijing marks the beginning of what could be a protracted legal battle, but it also signals that regulators and consumers are increasingly unwilling to accept marketing promises that outpace technological reality. For Tesla, the bill for selling Full Self-Driving before it existed is coming due around the world, and China may be where the most significant damages are awarded.
