'I'm taking Tesla to court because I want it to succeed', says billionaire entrepreneur

An entrepreneur is suing Tesla over a "squeaking" seat, allegedly for benefit of the firm. Photo / 123RF

A tech entrepreneur is suing Tesla over a "squeaking" seat in one of its electric cars in an extraordinary case the billionaire motorist says he hopes will teach the company the value of customer service.

Alain Cohen - who made his fortune building internet companies - is squaring up against Elon Musk for a legal battle which he claims is motivated by his "love" of the eco-friendly cars.

He says he wants to drag Tesla through the courts because he wants the company to succeed - and by forcing it to respond to customer quibbles rather than focusing on the latest technology means this is more likely to happen.

Washington-based Mr Cohen has filed a writ in Fairfax County, Virginia, demanding a jury trial as he claims damages of US$50,000 (NZ$68,000) over contract and warranty breaches.

Court documents show he bought a US$125,000 (NZ$170,700) Model S car with a warranty but was annoyed by a "frequent squeaking noise believed to emanate from the rear seat".

When it was taken in to be repaired the car suffered a "puncture" to the leather of seat and the mechanic was unable to get hold of a replacement part when he returned the car - while the squeaking had not been rectified.

Then began a months long back and forth between Mr Cohen and Tesla as he tried to get the damage repaired and the noise rectified. He also claimed a host of other problems surfaced, with him unable to get hold of Tesla to sort out his troubles.

Eventually he abandoned his attempts and turned to the courts to try to get a resolution in a move he says is likely to cost him more in legal bills than he is likely to receive if the claim is successful.

"This is not about the money. I'm prepared to spend what it takes because I want Tesla to succeed and going to court is the only way to get Tesla's attention on customer service," said Mr Cohen.

"I love the cars but at this point, not the company."

The entrepreneur - who has owned three Tesla cars - says he "admires and understands" Tesla's vision of encouraging green energy and technology but says Mr Musk cannot afford to "all-but abandon loyal consumers. Tesla must remember it is not just a research lab but a product company".

Tesla has just launched its Model 3 car - intended to be an affordable mass-market vehicle which makes electric cars a realistic alternative to petrol and diesel vehicles.

The Model 3 is the car which is expected to make - or break - Tesla as it battles to turn from a relatively niche player into a serious force in the motor industry.

In 2016 the company produced just under 90,000 cars, making it a minnow compared with the world's biggest car companies VW Group and Toyota, which each produce about 10m cars a year.

So far Tesla has secured almost 500,000 reservations for the Model 3 and the company is racing to increase its manufacturing facilities to meet demand.

A spokesman for Tesla said the company regularly scored highly in customer satisfaction surveys and works closely with consumers, but added: "We will also strongly defend ourselves against claims that are unjust or lack merit."

Referring to Mr Cohen's claims, he said all the issues had been fixed bar the seat, adding the car had not been brought in for it to be replaced.

"Even though there are no remaining issues with his car, the customer has demanded a new vehicle, plus an additional cash payment," the spokesman added.

"These demands are simply unreasonable."