Tesla busted and fined by Australian consumer watchdog

The US electric car maker allegedly breached safety standards and was handed 10 infringement notices.

| More on:
A woman in jeans and a casual jumper leans on her car and looks seriously at her mobile phone while her vehicle is charged at an electic vehicle recharging station.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

US electric car maker Tesla Inc (NASDAQ: TSLA) has paid a fine after the Australian consumer watchdog accused it of breaching mandatory safety standards.

The Australian Competition and Consumer Commission (ACCC) revealed Thursday that the US$824 billion giant's local arm, Tesla Motors Australia Pty Ltd, was penalised $155,460 in response to 10 infringement notices.

The alleged violations related to three models of Tesla's key fobs and two models of its illuminated door sills.

The ACCC accuses the car company of not conducting safety tests and putting on safety warnings that are mandatory for products that include button batteries.

Button battery safety and information standards came into effect in Australia in June last year, in a world-first measure.

Australia leading the world in button battery safety 

The danger is that children have died in the past from button battery accidents.

ACCC deputy chair Catriona Lowe warned that the mandatory testing and labelling requirements are there for a reason.

"Any failure to test these products before they are sold poses an unacceptable risk to children," she said.

"We expect all companies, large and small, to comply with the mandatory button battery standards to ensure children are protected from the dangers of button batteries."

In total, Tesla was found to have sold 952 items that allegedly breached the safety standards.

The five models involved are:

  • Model 3/Y key fobs
  • Model X key fobs
  • Model S key fobs
  • Model 3 illuminated door sills
  • Model S illuminated door sills

Since the ACCC's investigation, Tesla removed the items from sale and tested them.

While the Model 3/Y and Model X key fobs have been retrospectively cleared, the other items are still undergoing testing.

Some of the affected key fobs are shaped like a car, which made it even more alluring for children to play with.

"Key fobs are often in easy reach and can be attractive to children, so if the battery compartment is not secure and the batteries become accessible, they pose a very real danger to children," said Lowe.

Tesla shares are up a whopping 143% so far this year.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Ten smiling business people wave to the camera after receiving some winning company news.
Share Market News

Here are the top 10 ASX 200 shares today

The ASX 200 exploded higher today, with one share up more than 17%.

Read more »

A fresh-faced young woman holds an Australian flag aloft above her head as she smiles widely on a beach as though celebrating a national day or event where Australia has been successful.
Share Market News

9 ASX 200 shares that stand to benefit from a rising Aussie dollar

A number of ASX 200 shares have historically tended to outperform in times of a strengthening Australian dollar.

Read more »

Man raising both his arms in the air with a piggy bank on his lap, symbolising a record high.
Record Highs

These 2 leading ASX 200 stocks are smashing all-time record highs today

Records are tumbling on the ASX 200 today as two leading stocks charge higher into uncharted territory.

Read more »

Two happy pharmacists standing together in a pharmacy.
Healthcare Shares

ASX 300 healthcare stock Sigma halted amid rumours of blockbuster Chemist Warehouse deal

Is Chemist Warehouse finally joining the ASX?

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Chalice Mining, Core Lithium, Perpetual, and Polynovo shares are racing higher

These ASX shares are having a very strong session on Wednesday. But why?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Evolution, Galan Lithium, Life360, and Resolute shares are dropping today

These ASX shares are missing out on the good times today.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Share Market News

Meet the ASX All Ords shares that management is buying up

These shares have all seen significant insider buying over the past week.

Read more »

A female ASX investor looks through a magnifying glass that enlarges her eye and holds her hand to her face with her mouth open as if looking at something of great interest or surprise.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »