Tesla has been accused of using “classic bait and switch” sales tactics in a class action lawsuit filed against the Palo Alto company for breach of contract over the recent unexpected price hike of its integrated glass tile Solar Roof product.
As One Step reported last month, a number of US Tesla customers have reported being hit with drastic and unexpected price increases on existing Solar Roof orders – of which they were notified by email – that have added up to 50% more to the cost of installation that they originally agreed to.
The issue was addressed by Tesla co-founder and CEO Elon Musk in the company’s quarterly earnings call last month, who confirmed that the price hikes had come down to some “some significant mistakes” the company had made in assessing the degree of difficulty of installation on certain roofs.
“We did find that we basically made some significant mistakes in assessing the difficulty of certain roofs,” Musk said in response to a question around the pricing issue.
“But the complexity of roofs varies dramatically,” he added. “Some roofs can be literally two or three times easier than other roofs. So, you just can’t have a one size fits all situation.”
Not surprisingly, Musk’s typically matter-of-fact explanation does not appear to have appeased affected Solar Roof customers. Bloomberg reported on Monday that a complaint had been filed in a federal court in Northern California, suing Tesla over the unexpected price hikes and accusing it of “deceptive” and unfair sales tactics.
“After completing the sales agreements, and while the consumers have been making plans for the installations, in classic bait-and-switch fashion, Tesla is now informing these consumers they must pay upwards of a 50% price hike on the cost of the Solar Roof if they want to proceed with the installation – and if they do not pay promptly, they risk losing their place in line for installation,” the complaint said. “This is nothing short of a deceptive and unfair scheme.”
US legal website Top Class Actions reported that the lead plaintiffs of that case were seeking to represent other Pennsylvania consumers who alleged a similar experience with their solar roof tiles contract. They accuse Tesla of violating state consumer protection laws and want the court to assess damages on behalf of Class Members.
“Tesla is demanding that Plaintiffs pay more than double for the Solar Roof from what was agreed-upon in the Contract,” the class action alleges. “Specifically, Defendant has increased the price of the Solar Roof from $30,139.20 to $61,255.25. Defendant has also increased the price of the Powerwall from $16,000 to $17,000.”
Business Insider last week reported that a class-action lawsuit had been filed in a California court, last Thursday, led by a customer claiming that Tesla had increased the price of his Solar Roof quote by more than $US70,000 after he had signed contracts.
That complainant, represented by the law firm Edelson PC, has reportedly brought the suit on behalf of anyone in the US that was told their Solar Roof price was going up after having signed contracts. The exact size of the class was not yet known, BI said. It’s unclear whether this is the same federal case reported by Bloomberg.
Rather than seek compensation, the California suit reportedly aims to compel Tesla to honor its original contract and install the roof for the original agreed-upon price.