Tesla settles lawsuit with Norway over electric car's performance

Tesla has reached an out-of-court settlement with 126 customers who complained that the electric car's performance did not live up to its marketing claims. 

Benoit Tessier/Reuters
A Tesla Model X is displayed on media day at the Paris auto show in September.

Tesla has agreed to pay 126 unsatisfied Norwegian car owners in an out-of-court settlement for a case that had been scheduled to begin on Monday.

The disgruntled customers, who will be paid 65,000 kroner ($7,700 USD) each, had claimed that their electric cars' performance did not live up to the carmaker's advertising. They said that their Model S P85D cars, which were marketed as having an "insane mode" of acceleration, were not as fast as promised.

The models, which was supposed to be able to reach 700 horsepower, only reached 469 hp, the car owners argued in the lawsuit.

The car "has too low horsepower," Norwegian attorney Kaspar Nygaard Thommessen, who represented the unhappy owners, told Bloomberg Technology in September. "And of course, it affects the car’s performance, according to the consumers." 

Tesla, for its part, has denied misleading its customers through marketing. 

The Model S P85D meets requirements "according to the measurement method required by the authorities," Tesla spokesperson Even Sandvold Roland told Bloomberg. 

According to the Norwegian business newspaper Dagens Naeringsliv, Tesla has now agreed to pay each car owner about half of what they had originally demanded. The owners will also have the opportunity to choose from alternative options, such as upgrades to make their cars go faster, Dagens Naeringsliv reports.

Norway is one of the world's top markets for electric cars, as Richard Read reported for The Car Connection in June: 

Electric vehicles already account for roughly 24 percent of new car sales in the Scandinavian nation, and as greater numbers of EVs roll into showrooms, their market share is increasing exponentially. (We mean that literally: electric car sales have doubled for the past several years.) 

Granted, this didn't happen overnight. The Norwegian government has been working toward such goals for some time, replacing municipal vehicles, mass transit vehicles, and taxis with emission-free alternatives, and offering attractive incentives to consumers interested in electric cars.

The Tesla Model S P85D is no longer available in Norway, but its successor, the P90D, costs 801,000 kroner ($96,700).

This report contains material from Reuters.

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