Ten Tesla owners just had their day in court over in Beijing, seeking $583,000 in damages in a consumer fraud lawsuit against Tesla’s Full Self-Driving system.
Elon Musk promised autonomous driving over 10 years ago, but finally admitted earlier this year that FSD is nowhere near capable of this. The Level 2 system has been a massive source of controversy for a while now, with Tesla drivers starting to grow frustrated at how behind the technology is compared to Musk’s claims.
One man even sued Tesla, stating that he’d paid $10,000 for FSD over Musk’s promises, which never came true. However, only a small handful of Tesla owners have brought the automaker to small claims court over the false claim. Tesla has largely gone unpunished for not delivering on a product that was promised — and paid for.
Until now.
Tesla faces serious lawsuit in China
In September 2025, a group of Tesla owners in China collectively sued the automaker for claiming FSD would offer unsupervised Level 5 self-driving capabilities. Which never happened. At the time, it was seven plaintiffs, but that’s since grown to 10.
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The Tesla owners explained that they paid around $7,800 for FSD between 2019 and 2021 due to Musk’s claims that autonomous driving was imminent. Musk also claimed that the price would increase later on, making the drivers even more willing to buy at that time, feeling a sense of urgency at his words.
However, owners with HW3 vehicles, including the models produced between 2019 and 2023, will never have that capability. Earlier this year, Musk said that HW4 hardware will eventually have the ability to drive autonomously (although this is currently just a claim as well). Tesla will be offering a discounted trade-in for cars with AI4 hardware to make up for it, but that’s not enough for Tesla owners seeing as they’d have to buy an entirely different car after paying thousands for FSD on their current model. (Also, it’s just another claim.)
The lawsuit in China alleges that not only were owners’ vehicles unable to perform as marketed, but the plaintiffs also accused Tesla of hiding the hardware limitations in order to sell more vehicles in the future. Sadly, this seems like something that would work on a lot of the people I see supporting Tesla on X, who seem more than happy to buy another Tesla after their original model didn’t work as promised.
But it’s not working in China. The 10 plaintiffs are demanding full refunds plus triple damages, the usual consumer fraud penalty in China.
In court, Tesla claimed FSD is “fully operational.” However, Tesla also renamed FSD “Tesla Assisted Driving” in China a week ago, which seems to be an admission that it doesn’t work as originally advertised. This probably won’t help Tesla as the lawsuit goes on. And with 1 million vehicles with HW3 hardware in China, this could end poorly.
Tesla already has trouble brewing in China, with the country banning hidden door handles and the steering yoke that Tesla notoriously uses. Meanwhile, Chinese EV brands are starting to take over the market.
The United States often follows suit, and with Tesla making insane claims about FSD’s abilities all over social media, this could spell trouble.