The Bottom Line
- Burden of Proof is High: When a product has a recurring defect, manufacturers face a significant hurdle in proving that external factors, rather than an inherent flaw, are the cause, particularly in consumer disputes.
- “Swap-and-See” Repairs Are Risky: A corporate strategy of repeatedly replacing parts without a thorough root-cause analysis can backfire. Courts may presume the product was faulty from the start, strengthening a customer’s right to cancel the purchase.
- Usage Fees Can Mitigate Losses: Even if a company is forced to buy back a product, it can argue for a substantial usage fee to be deducted from the refund, especially if the customer continued to derive significant benefit from the product despite the defect.
The Details
This case revolves around a Tesla owner who, approximately two and a half years after purchase, began experiencing persistent failures when trying to charge the vehicle at public AC stations. Over the next two years, the car was taken in for repair eight times, and the onboard charger was replaced on at least five occasions. Frustrated with the recurring issue, the customer ultimately cancelled the sales contract. The Amsterdam Court of Appeal has now largely upheld the customer’s right to do so, ordering Tesla to take the vehicle back and issue a refund.
The court’s decision hinged on the principle of non-conformity—the idea that a product must be fit for the purpose for which it was sold. Given the recurring nature of the charging failure and Tesla’s inability to provide a permanent fix, the court applied a legal presumption that the defect existed from the moment of delivery. Tesla was then tasked with proving otherwise. The company argued that the issue was not the car, but two specific faulty public charging stations that caused short circuits. However, the court found Tesla’s evidence unconvincing, as it was gathered long after the main period of failure and the data presented was ambiguous. Critically, the court highlighted a statement from a Tesla engineer who testified that the company’s service model prioritizes “replacement of parts in place of in-depth investigation into the cause”—a practice that ultimately weakened Tesla’s legal position.
While Tesla lost the core argument, the company secured a partial financial win. The lower court had ordered a full refund minus a €20,000 usage fee. The Court of Appeal, however, increased this fee to €50,000. The court noted that despite the “hinder, ergernis and overlast” (hindrance, annoyance, and nuisance), the owner had still driven the car extensively, adding approximately 80,000 kilometers to the odometer during their ownership, while also having access to a free loaner car during repairs. This extensive use, the court reasoned, justified a larger deduction from the refund owed to the customer. This serves as a key reminder for businesses that even in cases of a product buyback, the customer’s continued benefit from the asset remains a crucial factor in the final financial settlement.
Source
Gerechtshof Amsterdam
