Tesla Model S suspension failures under scrutiny by safety agency

By Neal E. Boudette, New York Times News Service

Thursday, June 9, 2016 | 6:41 p.m.

The nation’s top auto safety regulator said Thursday that it was looking into a series of suspension failures involving Model S luxury cars made by Tesla Motors. It also said it had warned the company to refrain from encouraging customers not to report safety concerns.

The regulator, the National Highway Traffic Safety Administration, learned that at least some Tesla customers who experienced suspension failures were asked to sign confidentiality agreements about the issue, an agency spokesman, Bryan Thomas, said in a statement.

“The agency immediately informed Tesla that any language implying that consumers should not contact the agency regarding safety concerns is unacceptable, and NHTSA expects Tesla to eliminate any such language,” Thomas said. “Tesla representatives told NHTSA that it was not their intention to dissuade consumers from contacting the agency.”

The regulator added that the agreements that Tesla required were “troublesome.”

Tesla did not respond to requests for comment.

The safety regulator is examining the Model S suspension — the springs, joints and other components that connect a car to its wheels — for possible defects that could be causing premature failures.

Since October, it has received 33 complaints of suspension parts breaking. A suspension breakdown can cause severe steering problems and make driving impossible, according to filings listed on the agency’s website.

A few of the complaints pertained to a requirement that owners sign confidentiality agreements in exchange for having their cars repaired. The suspension problems and the issue of the nondisclosure agreements have also been discussed on blogs for Tesla owners.

The battery-powered Model S, with a starting price of about $70,000, is Tesla’s top-selling car. Tesla has just started offering a sport utility vehicle, the Model X, and is planning to offer a compact car, the Model 3, next year.

The company hopes the Model 3 will become its top seller and says it has already received $1,000 deposits from about 375,000 potential buyers.

The suspension issue with the Model S is the latest sign of quality concerns. The Model X SUV was recalled earlier this year because of a problem with its rear seats.

Tesla’s first model, the two-seat Roadster, which was produced from 2008-11, also had its problems.

At Tesla’s annual shareholder meeting last month, Elon Musk, the company’s chief executive, acknowledged that the Roadster had been plagued by a number of issues.

“This car, even though it met all regulatory requirements, it was completely unsafe, broke down all the time and really didn’t work,” Musk said.

Two years ago, the safety administration looked into two instances in which Model S cars caught fire. It determined that the fires were caused by road debris striking the vehicle’s underside, and closed the matter after Tesla agreed to reinforce the shield that protects the battery.

For most of its 13-year history, Tesla has tried to break away from many standard auto industry practices, a strategy that at times courts controversy. Its practice of selling its cars online without dealers has led to court battles in several states. The company is also building a gigantic battery factory in Nevada and often announces news via tweets by Musk.

“Everything they do, they try to do differently than the traditional auto company, but they all have to deal with the same rules,” said Michelle Krebs, an analyst with the firm Autotrader.

Krebs said she had never heard of a car company requiring customers to sign confidentiality agreements in exchange for repairs of potential safety defects. “It does raise eyebrows,” she said. “It may have happened before. I’ve just never seen it.”

In its statement about the inquiry, the NHTSA did not elaborate on the extent or details of Tesla’s use of nondisclosure agreements. But according to accounts posted online, some customers who complained about suspension problems had their cars fixed on the condition that they agreed in writing not to talk about the issue or how the company dealt with it.

An auto industry blog, dailykanban.com, posted what it said were excerpts from the agreement, along with a scanned copy. “You agree to keep confidential our provision of the Goodwill, the terms of this agreement and the incidents or claims leading or related to our provision of the Goodwill,” the document said. “Goodwill” is the term Tesla used to refer to any repairs or compensation it made because of a suspension failure.

The agreement posted on the blog released Tesla from any liability and barred the car owners from filing legal proceedings against the company.