Tesla has rebranded its Chinese driver-assist system twice in 14 months, but still cannot offer the product it sold owners years ago. By Stewart Burnett
Ten Tesla owners in China have taken the automaker to court, alleging it knowingly deployed fraudulent marketing of its Full Self-Driving (FSD) software in the world’s largest auto market. The plaintiffs are seeking more than CN¥3.95m (US$583,000) in combined damages, arguing that Tesla sold them technology it could neither deliver nor had received regulatory approval to deploy.
The lawsuit centres on FSD packages purchased between 2019 and 2021, when Tesla sales staff and Chief Executive Elon Musk reportedly assured buyers that full self-driving capability was imminent and that prices would rise. By using this framing, the automaker encouraged early purchases despite no concrete timelines or clear technological readiness.
When Tesla finally began rolling out its driver-assist software in China in February 2025, it worked exclusively on vehicles equipped with Hardware 4.0. Owners of Hardware 3.0 cars, which means every vehicle produced between 2019 and 2023, were excluded entirely, and Tesla is estimated to have more than one million such vehicles on Chinese roads. The hardware exclusion is the lawsuit’s sharpest edge; if Chinese consumer protection law’s triple-damages standard were applied across the locked-out owner base, the theoretical liability would run into the billions.
Little surprise, then, that hundreds of additional owners are reportedly consulting lawyers about joining their own claims according to local news outlets. The development comes not so far removed from a quiet concession from Tesla in the form of a rebrand; in March 2025 it switched out the FSD brand for the more anodyne ‘Intelligent Assisted Driving’ following regulatory changes about how driver-assist technology is marketed in the Chinese mainland. A plaintiffs’ counsel has framed the change as an implicit admission that the original branding was misleading; Tesla disputed the claims, arguing that some features are fully functional, others partially so, and additional functions remain in development.
Tesla has been pushing for FSD approval in China for years
A second rebrand in May 2026 to ‘Tesla Assisted Driving’ serves as yet another nomenclature adjustment without any corresponding expansion of the technology’s approved scope. That Tesla has now rebranded the same product twice in little over a year, each time under regulatory or legal pressure, suggests a company struggling to reconcile its global marketing posture with the practical and legal realities of the Chinese market.
The lawsuit arrives as Tesla’s domestic rivals have decisively forged ahead on intelligent driving. Xpeng launched VLA 2.0 in March 2026—not in a beta stage, but as a market-ready, shippable product—and its Chairman and Chief Executive, He Xiaopeng, has described it as “the best of the best” among autonomous driving systems in China. Xpeng’s Vice Chairman and President, Brian Gu, said usage of the system among existing customers is running at 120% above the prior generation, with a European rollout targeted for Q1–Q2 2027. In the most recent S&P Global Mobile software-defined vehicle readiness ranking, Xpeng came in one position above Tesla—the company it is most often compared against.
The China case is not isolated. Lawsuits around Tesla’s self-driving marketing have plagued Tesla for years in the US; one fatal crash involving Autopilot in Florida led to US$243m in fines and legal fees for the automaker. It is happening elsewhere too: in October 2025, thousands of Tesla owners in Australia filed a class action alleging misrepresentation of FSD and driver-assist capabilities; a Dutch Model 3 owner launched a collective claim site targeting HW3.0 owners across the EU, attracting more than 6,600 participants.
Tesla’s total potential exposure from FSD-related lawsuits worldwide has been estimated at US$14.5bn. The Beijing case is modest by dollar value, but its significance lies in the precedent it could establish under Chinese consumer protection law—a framework built for exactly the kind of conduct the plaintiffs allege.