Elon Musk faces pressure to pay nearly 13,000 billion VND in compensation

Elon Musk faces pressure to pay nearly 13,000 billion VND in compensation for false advertising about Tesla electric cars

One of Elon Musk’s most ambitious statements – “Tesla cars have full hardware for complete self-driving” is now the focus of a major lawsuit and the risk of causing billions of dollars in financial damage to Tesla.

According to Electrek, millions of Tesla car owners may be compensated after Musk himself admitted that the HW3 chip-based car line, which accounts for about 4 million units worldwide, is not capable of supporting the high-level self-driving feature as advertised by the company.

Elon Musk faces pressure to pay nearly 13,000 billion VND in compensation for false advertising about Tesla cars.

Elon Musk faces pressure to pay nearly 13,000 billion VND in compensation for false advertising about Tesla cars.

The “robotaxi promise” from 2016 has not yet come true

Since 2016, Tesla has affirmed that all new car models are equipped with “all the hardware needed for full self-driving”. CEO Elon Musk even promised that software updates would help these cars turn into “robotaxi” vehicles that do not need a driver and can operate themselves in all conditions.

However, nearly a decade has passed, that has not come true. While the Full Self-Driving (FSD) software has been continuously upgraded, the hardware on the car, specifically the HW3 self-driving computer, has not been able to meet the promise. By January 2025, Elon Musk officially admitted that the HW3 computer was not powerful enough to operate the car fully autonomously.

Tesla has now switched to the more powerful HW4 chip line, but upgrading millions of older cars is a difficult problem. Elon Musk said that replacing the hardware is “very painful”, and expressed relief that “not many people buy the FSD package”.

Elon Musk faces pressure to pay nearly 13,000 billion in compensation for false advertising about Tesla electric cars Photo 2

Is Tesla violating false advertising?

According to Electrek’s estimate, about 500,000 Tesla HW3 cars worldwide have been purchased with the FSD package. Replacing the hardware for this group of customers could cost more than 500 million USD. However, the problem does not stop there.

Tesla’s original claim that “every vehicle since 2016 has full self-driving hardware” doesn’t just apply to FSD buyers. That means any HW3 owner, regardless of whether they signed up for FSD, has legal grounds to seek a hardware upgrade or compensation.

A 2022 ruling even set a precedent when a court ordered Tesla to upgrade its self-driving computer for free to qualify for FSD, potentially opening the door to millions of similar lawsuits.

Electrek said this was clearly a case of “false advertising.” Tesla told customers that its cars “had full self-driving hardware,” but when users wanted to activate the feature, the company asked them to “pay extra for a hardware upgrade.”

If the lawsuits were accepted and resolved in favor of consumers, Tesla could face billions of dollars in damages. In addition to financial losses, the incident also seriously affected the company’s reputation as well as the self-driving car development strategy that Elon Musk has pursued for many years.