A University of Auckland senior lecturer is taking Tesla to the Disputes Tribunal after paying $4,800 for a full self-driving feature that Tesla says hardware in his car cannot support. He is seeking fair compensation under New Zealand consumer law.
A New Zealand Tesla owner who paid $4,800 for a self-driving feature that the company now says his car's hardware cannot deliver is taking the matter to the Disputes Tribunal — in a case that highlights how consumer protection law applies to promises made alongside major purchases.
Benjamin Liu, a senior lecturer in commercial law at the University of Auckland, purchased Tesla's Full Self-Driving (FSD) capability in 2020. At the time, Elon Musk promised the software would be available soon and told buyers the earlier they purchased, the less they would pay.
Liu's car runs on Hardware 3, which Tesla has since said does not have the capacity to achieve unsupervised self-driving — a position the company confirmed in its 2026 Quarter 1 earnings call.
"They said Hardware 3 simply does not have the capability to achieve unsupervised FSD," Liu said. "We did think at one point it would have that."
The compensation offer
Tesla has offered to refund Liu's $4,800 payment. But he is not accepting that offer. The refund would only cover around 30 months of the subscription alternative Tesla now offers — at $159 per month — rather than the lifetime access the original purchase implied. He would also need to buy a new car to access the newer Hardware 4 that supports the feature.
Liu is arguing the refund does not reflect what he paid for. "Let's let the tribunal decide what is fair under New Zealand law," he said.
The consumer law arguments
Under the Consumer Guarantees Act, services must be delivered within a reasonable time. Liu argues Tesla's failure to deliver FSD years after purchase raises questions about whether that obligation has been met.
The Fair Trading Act provides a broader basis for the complaint. Under that Act, a trader is not permitted to make misleading representations — and Liu argues Tesla's repeated promises about FSD capability fall squarely in that territory.
"In terms of Consumer Guarantees Act, I think there's provisions saying that if you sell a service or product, that should be delivered within a reasonable period of time," Liu said. "And in terms of the Fair Trading Act, the case against Tesla is even stronger because under the act, a trader like Tesla is not allowed to make misleading representations."
The case comes as research for employment marketplace SEEK suggests wrong hires cost SMEs around $20,000 each — a reminder that financial disputes and costly errors touch both consumers and business owners alike.
The wider context
The dispute illustrates the financial risk when product capabilities fall short of marketed promises. Liu is not alone — technology commentator Paul Spain said he would not have bought his Tesla in 2019 if it were not for the FSD promise.
A hearing date is set for July. The case will test how New Zealand consumer law applies in situations where a company makes forward-looking promises about technology that prove unable to be delivered on existing hardware.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.