The settlement was announced in a document filed in federal court late Thursday. U.S. District Judge Beth Labson Freeman must approve the deal to bring the case to a close.
Tesla says it has updated the autopilot hardware since unveiling it in 2016, but acknowledged the features have taken longer to gain traction.
“As time passed since we first unveiled Hardware 2, it eventually became clear that it was taking us longer to roll out these features than we would have liked or initially expected,” Tesla said in a statement. “We want to do right by those customers, so as part of a proposed settlement agreement for a class action lawsuit filed last year, we’ve agreed to compensate customers who purchased Autopilot on Hardware 2 vehicles who had to wait longer than we expected for these features.”
The case stems from a class action filed in April 2017, in which Tesla owners said the autopilot function made the car “behave as if a drunk driver is at the wheel.”
Enhanced autopilot features cost an additional $5,000 and were touted by Tesla as a way of relinquishing the stress of highway driving.
But lead plaintiff Dean Sheikh said the features promised by Tesla were not ready for the big time.
“In fact, new vehicles equipped with Tesla’s newest software still do not have some of the basic safety features that are standard features of cars equipped with the older software – and that are supposed to be standard features of Tesla’s newest vehicles, too,” Sheikh said. “Yet Tesla promised imminent safety-enhanced and auto-driving nirvana.”
Tesla acknowledged deficiencies in the first rollout of the autopilot function but said it is committed to doing right by its customers. As part of the settlement, the company will put approximately $5 million in a settlement fund, with customers expected to net between $20 and $280 as compensation.
Tesla’s autopilot technology continues to be controversial, with the company saying the software program will reduce auto accidents by 40 percent. Teslas with the autopilot function enabled have been involved in crashes, including a recent case in Southern California where the car allegedly sped up before crashing into a fire truck.
The case was closely watched in the automotive industry, as it was the first and only known case to directly relate to the autopilot function. However, two consumers lodged a complaint with the Federal Trade Commission on Wednesday, claiming the use of the word “autopilot” in connection with the software was misleading.
Tesla maintains the function will only get better as more updates are incorporated.
“Our neural net, which expands as our customer fleet grows, is able to collect and analyze more high-quality data than ever before, which will enable us to roll out a series of new Autopilot features in 2018 and beyond,” the company said.