A Chinese court ruled Tesla to refund the purchase price of the Model S plus three times the compensation – a total of 1.5 million yuan. In mainland China, this is the first time court sentenced Tesla has to 3 times payment to consumers. The reason is that Tesla has sold substandard used cars to consumers.
After 755 days, Han Chao finally waited for the verdict in his favor.
According to the civil judgment issued by the Beijing No. 2 Intermediate People’s Court on September 16, the court rejected the appeal of the defendant Tesla Automobile Sales and Service (Beijing) Co., Ltd., and the original judgment was upheld.
According to Chinese law, after Tesla loses the lawsuit, it needs to return 379,700 yuan to Han Chao to purchase the car. According to the “Consumer Rights Protection Law,” the compensation is 1,139,100 yuan, for a total refund of 1,518,800 yuan. According to the latest exchange rate, Tesla will have to pay about 235,000 UD to Han Chao.
This time it is the final trial, and Tesla can no longer appeal.
Let’s review what happened: at the end of May 2019, Han Chao bought an officially certified second-hand car on Tesla’s official website, model S sedan.
Before the purchase, the sales staff informed him that the car had not had a significant accident, and there were no problems such as blisters, fire, and structural damage.
However, on August 24, 2019, Han Chao discovered a problem with this car.
“During normal driving, there was a sudden loud bang, and it was paralyzed for an instant. Five fault codes popped out on the screen, prompting ‘the vehicle cannot restart,’ ‘the vehicle is closing,’ etc. The brakes of the vehicle and the electric door were completely paralyzed,” Han Chao claimed.
After Tesla inspected the car, the company said that the big bumper, umbrella valve, and other parts of the vehicle were damaged and needed to be replaced, and told him, “The old car is like this, no need to make a fuss.” At that time, the Tesla service center provided Han Chao with a mobility scooter.
Han Chao was not satisfied with Tesla’s handling method. He asked whether to return the goods or replace a car. Tesla rejected Han Chao’s request.
Later, Han Chao commissioned the Tianjin Motor Vehicle Judicial Appraisal Agency to conduct a full-vehicle inspection of the vehicle and then unexpectedly discovered cutting and welding marks on the rear side panel of the car, which was suspected of being an accidental vehicle.
Therefore, Han Chao took Tesla to court and demanded that Tesla return the money he bought the car and pay him three times.
The Chinese court supported Han Chao’s request because the court organized a third-party agency to appraise the vehicle. The appraisal results showed that the vehicle purchased by Han Chao had cutting and welding, which impacted safety and depreciation. The appraisal opinion is “The small car with license plate number 津AD16231 (Tesla) 5YJSA6H1 is an accident car”.The court accepted this appraisal result.
The court held that Tesla guarantees that “there is no structural damage” to the vehicle, and there is no objective standard basis for structural damage.
However, Tesla did not follow the principle of good faith to inform consumers of the vehicle’s condition, especially the past accidents and maintenance.