New Zealand Tesla Owner Takes Legal Action Over Unmet Promises
Tesla owners around the world are increasingly taking legal action against the electric car company, accusing it of failing to deliver on promises made about its autonomous driving capabilities. This growing trend has caught the attention of consumers in New Zealand, where one owner is now pursuing a claim through the Disputes Tribunal.
During Tesla’s 2026 Quarter 1 earnings call, many owners were disillusioned as the company admitted that its latest hardware was not capable of fully self-driving without human supervision. Elon Musk, the co-founder and CEO of Tesla, acknowledged this during the call, stating, “Hardware 3 simply does not have the capability to achieve unsupervised FSD.” He added that the company had once believed it would have that functionality.
The term FSD stands for Full Self-Drive, a feature that Tesla sold to car owners for years with the promise that their vehicles would eventually be able to drive themselves. Benjamin Liu, a Tesla owner in New Zealand, is one of those who feel misled by these promises.
Liu, who has been a long-time fan of Tesla, bought his first car in 2017. At the time, the owner community was small, and Tesla often invited owners to events such as boat trips and social gatherings. “We show up, we have a drink, go on a boat trip, that kind of thing,” he recalls. Despite his strong belief in the company’s mission, Liu felt compelled to take legal action after the unfulfilled promise of FSD.
In 2020, Liu paid $4800 for Tesla’s FSD capability. At the time, Musk had promised that the software would be available soon and encouraged early buyers to purchase at a lower cost. However, Musk’s recent admission that Hardware 3 cannot support unsupervised FSD shattered Liu’s hopes.
“I’m not saying this is fraudulent. I’m not saying Tesla or Elon Musk is lying. I’m simply saying what you (Tesla) said is misleading. I was misled. Let’s let the tribunal decide what is fair under the New Zealand law.”
Newer Tesla cars in New Zealand come with Hardware 4, which includes the necessary cameras and memory space to support a supervised version of FSD. This allows the car to drive to destinations without the driver’s hands on the steering wheel, but requires constant monitoring. Liu’s car, however, is equipped with Hardware 3. He experienced Hardware 4 when he drove a loan car during a service, and he was impressed by the enhanced capabilities.
His friend, who owns a car with FSD, shared similar sentiments. “She says ever since she has this full self-driving, she's able to have coffee or do makeup when the car drives her to her office. She says it's really, really useful. When she goes on a longer trip, again, it's very stress-free.”
Despite these advancements, Liu remains uncertain about when or if Tesla will update his Hardware 3 car. The company had previously mentioned plans to build “micro-factories” worldwide to facilitate such upgrades, but no timeline has been provided.
Liu has attempted to negotiate with Tesla, who offered a refund of the $4800 he paid in 2020. However, he is not satisfied with the offer. If he were to purchase the FSD capability today, it would cost more than $4800, as Tesla no longer offers the option to buy it outright. Instead, customers must subscribe to the service for $159 per month. The $4800 refund would only cover 30 months of the subscription, rather than a lifetime.
Additionally, Liu would need to purchase a new car equipped with Hardware 4 to access the full FSD features.
As a senior lecturer at the University of Auckland, Liu teaches commercial law and has worked at international law firms. He believes he has a strong case based on New Zealand consumer protection laws. Under the Consumer Guarantees Act, products and services should be delivered within a reasonable timeframe. The Fair Trading Act also prohibits misleading representations, which Liu argues Tesla has made through its promises about FSD.
Liu is not alone in his concerns. Technology commentator Paul Spain, who bought his Tesla in 2019, stated that he would not have purchased the $85,000 vehicle without the promise of FSD. “It certainly dents your confidence in the company,” Spain said. “While I think they’ve been an incredibly innovative company and they’ve really spurned a global uptake in electric vehicles, they do seem to have really oversold the autonomous driving capabilities over quite a period of time.”
Spain called on Tesla to address the issue with its customers, emphasizing the importance of honoring the trust placed in the company by its users.
According to a search of the Motor Vehicles Disputes Tribunal, there have been six cases involving Tesla New Zealand ULC over the past five years. However, none of these cases specifically addressed issues related to FSD.
Consumer NZ CEO Jon Duffy noted that overseas companies operating in New Zealand must comply with local laws. “However, enforcing the law can be difficult if the company doesn’t have a physical presence here or at least an email address for service,” he said. Fortunately, Tesla does have a physical presence in New Zealand, which means consumers can pursue remedies such as requesting a refund, filing a claim with the Disputes Tribunal, or reporting the issue to the Commerce Commission.
Tesla has not commented on the situation publicly.
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