Tesla, the electric vehicle (EV) giant, is once again facing regulatory challenges, this time in France. Government investigators have accused the company of engaging in deceptive business practices related to its vehicle sales and Full Self-Driving (FSD) claims.
The French finance ministry’s Competition, Consumer Affairs, and Fraud Control office has issued Tesla a formal order to address several alleged infractions. These include misleading consumers about the autonomous capabilities of its vehicles, issuing sales contracts without essential delivery details, and delaying customer refunds. The investigation, which began in 2023, has intensified as Tesla’s brand faces increased scrutiny in Europe.
Tesla has been given four months to comply with French consumer protection laws or face fines of €50,000 per day until compliance is achieved. As of now, Tesla has not publicly responded to the order.
This enforcement action comes at a challenging time for Tesla in the European market. The company’s EU vehicle sales dropped by 49% year-over-year in April, and May marked the fifth consecutive month of decline in key European markets. Analysts attribute this decline in part to CEO Elon Musk’s controversial political activities, including his support of far-right parties like Germany’s AfD.
In addition to regulatory issues, Tesla is also facing legal challenges in France. A group of Tesla owners in the country has filed a lawsuit alleging that the company’s vehicles have become symbols of far-right politics due to Musk’s association with former U.S. President Donald Trump. This has led to reputational damage for the company in France.
Despite these challenges, Tesla’s stock price has remained resilient. The company recently launched its much-anticipated Robotaxi service in Austin, Texas, which has contributed to a positive uptick in its stock price.
As Tesla navigates political backlash, legal battles, and market share erosion in Europe, regulatory scrutiny like this could present further obstacles to the company’s global growth. However, with innovative initiatives like the Robotaxi service, Tesla continues to demonstrate its commitment to technological advancement and sustainability in the EV market.