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TSLA

Tesla wins South Korean FSD suit; Italy backs EU approval

Sources (9)
  • Mixed: A Seoul court dismissed every claim in the FSD refund suit by 89 HW3 owners, but it is first instance and HW3 liability is unquantified.
  • Good news: Italy backs EU approval of Tesla Assisted Driving, the second major EU country after Germany.
  • Bad news: Robotaxi now gives new Houston and Dallas users a free first ride, a sign rider volume is too low.

What we watchThe 1 Dec meeting of the EU Technical Committee on Motor Vehicles, which may vote on approval.

Read the full notes

Legal risk is narrowing. A South Korean first-instance ruling and the US Ninth Circuit's decision have now gone Tesla's way in succession, and the contract wording has held up, but the HW3 liability is still unquantified. The EU path for FSD approval rests on Germany and Italy, which together hold about 32% of the population;

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watch the 1 Dec vote of the Technical Committee on Motor Vehicles. The Robotaxi bottleneck has moved from building cars to winning riders and deploying them: new users in Houston and Dallas get their first ride free, and Cybercab has gone on a motorway for the first time.

Key evidence

  • On 29 Oct, Civil Division 30 of the Seoul Central District Court dismissed every claim in the FSD refund suit brought by 89 HW3 owners against Tesla Korea, each of whom paid about KRW 9 million in 2019-2022. The court found that the FSD contract does not guarantee fully driverless L5, that features promised for the future depend on regulation and technical progress and so form an open-ended contract, and that regulatory delay is not Tesla's fault (Star News, Reuters, Bloomberg, 29 Oct)
  • Following the US Ninth Circuit's 16 Oct reversal of class certification in the FSD class action, this is the second favourable ruling in a row across the two markets. It is only a first-instance ruling, though, and the HW3 upgrade or compensation liability is still unquantified (the earnings call skipped it)
  • On 29 Oct, Italian deputy prime minister and transport minister Matteo Salvini posted on X that, after a call with Musk, Italy supports the EU approving Tesla Assisted Driving as soon as possible (Salvini's original X post, relayed by Numerama and TeslaNorth)
  • After the German transport ministry's stance on 6 Oct, Italy is the second major EU country to take Tesla's side publicly. EU-level approval could be decided at the 1 Dec meeting of the Technical Committee on Motor Vehicles. Ten EU countries have so far recognised the approval granted by the Dutch vehicle authority
  • In a written reply on 23 Oct, the Swiss Federal Roads Office said Tesla has not submitted an application in Switzerland at all (Tesla Mag). France has agreed only to road testing and has not voiced support
  • The Robotaxi app shows new users in Houston and Dallas a free first ride at $0.00; Austin does not have it yet (Not a Tesla App, citing Ethan McKanna's test on 29 Oct; not an official announcement)
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  • A passenger posted a video on 29 Oct showing a Cybercab carrying a rider at 55 mph on an Austin interstate in the rain, the first time a Cybercab has been seen on a motorway (Drive Tesla Canada)
  • Moravy said the Cybercab line does not run every day because deployment cannot keep up. Texas has 1,080 registered, but after Houston's service area grew tenfold there are only a few dozen Model Ys on the road. The subsidised first ride shows rider volume is too low, and the bottleneck has moved from building cars to winning riders and deploying them

Catalysts to watch

  • The 1 Dec meeting of the EU Technical Committee on Motor Vehicles may vote on approving Tesla Assisted Driving
  • Appeal by the South Korean owners (follow-up to the first-instance ruling)
  • Whether the free first ride is extended to more cities
  • When Dallas gets Cybercab
  • France's position on Tesla Assisted Driving (the speed-tolerance issue is the sticking point)
  • Quantified disclosure of the HW3 upgrade or compensation liability

Risks

  • The South Korean ruling is only first instance, the HW3 liability is still unquantified, and an appeal could overturn it
  • EU approval needs a double majority of 15 countries and 65% of the population, and France and speed tolerance remain sticking points
  • Robotaxi needs subsidies to win riders, which suggests rider volume is too low after the expansion; the deployment and demand bottlenecks are real
  • Switzerland has not received an application, so some countries are progressing slower than expected

Sources 9

  1. Star News, 29 Oct
  2. Reuters, 29 Oct
  3. Bloomberg, 29 Oct
  4. Salvini's original X post, 29 Oct
  5. Numerama
  6. TeslaNorth
  7. Tesla Mag, 23 Oct
  8. Not a Tesla App, citing Ethan McKanna, 29 Oct
  9. Drive Tesla Canada, 29 Oct

A brief is a lead for our research, not a verified conclusion or advice.