Tesla Denies Report Of Possible Safety Defect In Model S & “Troubling” Nondisclosure Agreements

Yesterday, regulators at the National Highway Traffic Safety Administration said it had begun looking into possible issues with the suspension on Tesla’s Model S sedans, but the high-end electric vehicle maker is currently denying that there are any safety issues with the Model S suspensions, or that there is a formal investigation into the matter.

The issue came to light after an article on DailyKanban.com noted reports of Tesla owners who are allegedly experiencing problems with their suspensions, including one owner of a 2013 Model S who says the “left front hub assembly separated from the upper control arm” after only putting 70,000 miles on the car.

The article also contains claims from some owners that they are being asked to sign nondisclosure agreements that they believe would prevent them from taking their issue to NHTSA.

The agency confirmed in statements that it was examining a “potential suspension issue on the Tesla Model S” and that it is “seeking more information from vehicle owners and the company.”

Additionally, NHTSA says it learned of Tesla’s “troublesome nondisclosure agreement” a month ago, and that the agency informed the car maker that “any language implying that consumers should not contact the agency regarding safety concerns is unacceptable.”

Tesla’s response, according to the NHTSA statement, was that it had no intention of dissuading owners from taking their concerns to regulators.

This morning, Tesla posted a lengthy statement on its blog, denying any issues with the Model S or its nondisclosure agreement.

“First, there is no safety defect with the suspensions in either the Model S or Model X,” writes the company, which contends that it knows about all service-related issues on its cars because all Tesla service centers are owned and operated by Tesla, as opposed to franchised dealerships. “Whenever there is even a potential issue with one of those parts, we investigate fully. This, combined with extensive durability testing, gives us high confidence in our suspensions.”

The company claims that the car whose suspension failed after only 70,000 had a ball joint that “experienced very abnormal rust,” and that Tesla has not seen this happen on any other cars.

“The car had over 70,000 miles on it and its owner lives down such a long dirt road that it required two tow trucks to retrieve the car,” explains Tesla, saying that it took one tow truck to get the car to the highway and one to get it from the highway to the service center. “When we got the car, it was caked in dirt.”

The company is also downplaying the request for information from NHTSA, claiming that it doesn’t even rise to the level of a “preliminary evaluation.”

Regarding the alleged nondisclosure agreements, even though NHTSA labeled them as “troubling,” Tesla contends that it “has never and would never ask a customer to sign a document to prevent them from talking to NHTSA or any other government agency.”

The company paints a rosier portrait of what these nondisclosure clauses — what Tesla refers to as “Goodwill Agreements” — are intended to prevent.

“When our customers tell us something went wrong with their car, we often cover it even if we find that the problem was not caused by the car and that we therefore have no obligations under the warranty,” reads the blog post. “In these situations, we discount or conduct the repair for free, because we believe in putting our customers’ happiness ahead of our own bottom line. When this happens, we sometimes ask our customers to sign a ‘Goodwill Agreement.’ The basic point is to ensure that Tesla doesn’t do a good deed, only to have that used against us in court for further gain.”

Tesla maintains that it rarely asks the customer to sign such an agreement, but says it “will take a look at this situation and will work with NHTSA to see if we can handle it differently.”

The carmaker maybe goes a bit too far by trying to rub the point in:

“It is deeply ironic that the only customer who apparently believes that this document prevents him from talking to NHTSA is also the same one who talked to NHTSA,” writes the company. “If our agreement was meant to prevent that, it obviously wasn’t very good.”

Or maybe the customer thought this issue was important enough to disregard the nondisclosure agreement?