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Tesla to clarify how customers may disclose problems

[June 11, 2016] By David Shepardson

WASHINGTON (Reuters) - Tesla Motors Inc on Friday revised a nondisclosure clause in its customer repair agreements after a U.S. regulator took issue with the practice, while the electric carmaker's chief executive separately called most customer reports of suspension problems in its Model S sedan fraudulent.

Tesla CEO Elon Musk went on the offensive on social media, saying in a tweet that 37 of 40 suspension complaints filed with the U.S. National Highway Traffic Safety Administration were fraudulent. "Would seem to indicate that one or more people sought to create the false impression of a safety issue where none existed," he wrote.

The NHTSA would only say that the company was cooperating fully with its review and that no suspension problems had been found "to date." Musk said the complaints were "fraudulent" because a "false location or vehicle identification numbers were used."

Reuters reported Thursday that anonymous individuals have filed a number of complaints of suspension problems on NHTSA's website, citing salvaged Tesla vehicles.

NHTSA spokesman Bryan Thomas said Tesla was cooperating "and NHTSA’s examination of the data is under way. To date, NHTSA has not identified any safety issue with Tesla’s suspensions."

He declined to comment on Musk's assessment of the complaints. On Thursday, NHTSA had criticized Tesla for entering into a "troublesome nondisclosure agreement" with a Model S owner with a suspension problem.

On Friday, NHTSA said "Tesla has clarified the language ... in a satisfactory way, resolving the issue" of the nondisclosure agreements..

Alexis Georgeson, a spokeswoman for the California-based green car maker, confirmed the change.

NHTSA said Thursday it was reviewing reports of suspension problems, but had not opened a formal investigation.

Tesla has denied any suspension problems, saying extensive durability testing and review of customer issues "gives us high confidence in our suspensions."

The possible safety defect in the Tesla Model S was reported on earlier this week by the auto-oriented website Daily Kanban, which cited owner complaints. The website linked to a Model S owner who wrote on a Tesla fan website that he had suspension problems and had received an email from an NHTSA investigator.

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A Tesla logo hangs on a building outside of a Tesla dealership in New York, U.S., April 29, 2016. REUTERS/Lucas Jackson/File Photo

The owner said Tesla agreed to pay 50 percent of a $3,100 repair bill if the owner agreed to keep the arrangement confidential.

Tesla said Thursday the car with over 70,000 miles had abnormal rust and that the Pennsylvania owner lived down such a long dirt road that it required two tow trucks to retrieve the car. The owner said the car had only been on a dirt road once or twice, and Musk later conceded to the Wall Street Journal that Tesla had erred in saying the owner lived on a dirt road.

NHTSA Administrator Mark Rosekind said on Thursday that the agency was reviewing the nondisclosure agreements to see if they had impeded owners from making complaints.

Tesla said in a blog post late on Thursday that it "has never and would never ask a customer to sign a document to prevent them from talking to NHTSA or any other government agency." But the company said it often requires customers to sign a "goodwill agreement" with a nondisclosure clause when the company agrees to cover or discount repairs even if it is not responsible.

Tesla noted the agreement did not mention NHTSA, and said it did not intend to stop customers from communicating problems to the agency.

NHTSA said on Thursday it "learned of Tesla’s troublesome non-disclosure agreement last month. The agency immediately informed Tesla that any language implying that consumers should not contact the agency regarding safety concerns is unacceptable."

(Editing by Matthew Lewis and David Gregorio)

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