Tesla Risks Consumer Rights Violation By Shipping Cars With Faulty USB Ports

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Tesla Risks Consumer Rights Violation By Shipping Cars With Faulty USB Ports
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As of November 6, Tesla Inc (NASDAQ:TSLA) has been shipping Model 3 and Model Y cars with defective USB ports from its Shanghai Gigafactory, due to the semiconductor shortage. As ports are only available for charging and not for data transfer, the automotive giant could face a consumer rights backlash.

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Defective Ports

According to the South China Morning Post, the USB ports in the front-row central consoles of the Model 3 sedans and Model Y can only be used for charging, and not for data transfer. The issue is due to the chip shortage affecting the automotive industry.

David Zhang, a researcher for the automotive industry at the North China University of Technology, says “The impact could be huge for Tesla, as consumers who consider the defect an important issue might switch to other brands, and it risks the violation of consumer rights by not giving advance notice to the buyers.”

Customers in the U.S. started sending queries regarding the issue, as they were delivered the related models with faulty USB ports, and sometimes with actual gaping holes instead.

Gary Ng, senior economist for Asia Pacific at French investment bank Natixis, said, “The automotive chip shortage should start easing in the second half of 2021, but the pressure will persist throughout 2022.”

Musk Sold More Shares

According to a filing from Friday, Elon Musk ended the week by selling a further $1.2 billion in Tesla shares at an average price of $1,030 a share. As reported by CNN, “Musk exercised the first block of 2.2 million of those soon-to-expire options on Monday, and then sold 934 million shares in order to pay the taxes on that exercise.”

“It brings his sales for the week to a total of 6.4 million shares, for a grand total of $6.9 billion,” the news outlet said.

The sale became the first for the automotive billionaire since 2016, and despite his Twitter poll stunt, the string of operations last week was intended to prepare himself for an upcoming tax bill “that will be triggered by his need to exercise 22.9 million options to purchase shares before next August.”

Reuters reports that Tesla shares were down 2.7% at $1,005.42 in early New York trading, after losing around $187 billion in market value over the past week.

Tesla is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.

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