Danny Roman runs a sustainable outdoor adventure company that offers biking and hiking tours in Southern California.
Danny Roman bought a new Tesla Model X and took delivery of the car on February 28, 2020.
Three days later, he informed the company that he was making the SUV electric under the seven-day, no-questions-asked policy that Tesla CEO Elon Musk was touting at the time.
Today, more than two years after Tesla took possession of the car, Roman still does not have his refund or access to the vehicle, which had an all-inclusive price of around $116,000, including various options and fees.
Records indicate that Tesla picked up its Model X and loaded it onto a tow truck on March 8, 2020, after which it expected its refund to arrive quickly. His bank advised him to ask the EV maker to initiate a “stop sale”, he recalls, and then his Tesla sales representative informed him that his refund would soon be processed.
Instead, several weeks later, while still corresponding with Tesla about the status of his return, Roman received a service alert from Tesla telling him to pick up the electric SUV. The alert explained that it had been repaired and was at a service center in Burbank, Calif., although he originally purchased the vehicle in Century City, about a 40-minute drive away.
Roman told CNBC he was stunned by the service alert. He says he never requested or authorized any repairs and that Tesla has previously acknowledged that he was returning the car. (The correspondence between Roman and Tesla, which he shared with CNBC, confirms his account.)
Roman stopped making payments on the car for a month because he thought everything was going well. Then the bank told him he had missed a payment and his credit rating had dropped 30 points. When he called to ask about it, he was told that Tesla had not issued the stop sale.
As the owner of a small business that offers biking and hiking tours in Southern California, Roman says he needed to maintain a good credit rating. So given Tesla’s stubborn stance on the Model X, he decided he had no choice but to continue making car payments to his bank and pay to keep the car insured.
Roman wanted to avoid any repossession by his bank and knew that the financial institution could have ruined his credit if he did not keep up the payments. He maintained insurance payments if the vehicle was damaged while in Tesla’s possession.
“If you stop paying your bank, it will destroy you! said Roman.
As a result, for two years Roman has been making payments on a car he does not own.
Tesla did not respond to a request for comment on its customer’s predicament.
Why he returned the car
Roman says he bought the car because he was a fan of Tesla, read that the Model X had an excellent safety rating and believed that driving a battery electric vehicle would reduce the environmental footprint of his personal transportation.
As the father of a child at that time, he was very concerned about safety. And as the owner of a sustainable outdoor adventure business, he felt buying a battery-electric car was a good way to underscore that commitment.
The car was marketed with a battery with a range of over 400 miles, essential for driving from Southern California to the San Francisco Bay Area and points along the way where it often travels and sometimes leads hikes by bike.
When he first pulled out the Tesla Model X, the vehicle’s range indicator showed that Roman had drained 15 miles from the battery after driving less than half a mile from home.
When he tried to recharge the vehicle’s high-voltage battery on the first day he got the car, driving to a Tesla boost station in Culver City, Roman said it took much longer than expected. sales reps had promised – hours, not 45 minutes – to charge up to or beyond 80% of the battery’s full range.
Roman shared photos with CNBC of the vehicle’s display and charging status from that trip. Even before the time he spent hooked up to a charging station, Roman said, he had already waited more than an hour to get access to a stand because there was a huge line of cars in front of him.
“It’s LA Everybody has a Tesla.”
Tesla owners wait to charge the batteries of their electric vehicles in Southern California.
Besides the battery issues, Roman said one of the vehicle’s hawk-wing doors stuck when he tried to open it. And he discovered that installing a charger in his apartment complex would cost 10 times the amount announced by Tesla sales representatives. Sales reps said he could install a charger in his home for about $700; they knew he lived in an apartment building, but instead offered a price for a charger in a stand-alone garage.
In the spring of 2019, Elon Musk told his millions of Twitter followers: “To be clear, orders are fully refundable, even after you’ve had your Tesla for a week” and “If anyone really wants to return the car in good faith on day 8, it’s good.”
So Roman returned his car.
Danny Roman’s Tesla Model X had battery and door issues that led him to return it to the electric vehicle maker in 2020.
At one point, messages from Tesla to Roman show that the company tried to convince him that it did not have a seven-day return policy when he purchased his vehicle.
But Tesla had the return policy on its website until Oct 2020 – months after buying and returning the Model X. (The return policy was also mentioned in its sales agreement.) After three months of back and forth with the company, including being told that its refund would be coming soon , then telling him he could choose in compensation, Roman sued the company.
To his surprise, instead of being able to sue, he was told that his case would go to an alternative dispute resolution process.
When he signed papers to take delivery of his Model X, Roman had agreed to an arbitration clause.
Roman’s predicament regarding the Tesla Model X highlights the vulnerability of American consumers being pushed into arbitration agreements in order to purchase services or items as a matter of course.
Mandatory arbitration is common in new and used auto sales, says Paul Bland, executive director of Public Justice, a consumer advocacy group.
For all intents and purposes, consumers get nothing by agreeing to arbitrate, he says. For companies, however, “their motivation is to limit liability and make it harder for a consumer to win an individual case if they have done something illegal,” Bland said. “It’s such a secret system that it’s much harder for consumers to find out what happened to people in prior related cases, and it’s much harder to have a class action.”
Roman says if he realized the company wasn’t honest with him about the car and the return process upfront, he wouldn’t have bought the Model X and agreed to arbitration . His arbitration is still ongoing.
Meanwhile, Roman had to rent another car to use instead of the Model X. He told CNBC he was renting a hybrid-electric Toyota Prius.
“Every time the money gets sucked out of my account, every month, I cringe,” Roman said. “On top of that, I’ve spent over a hundred hours of my life trying to figure this out and worrying.”
In February this year, Tesla – still refusing to acknowledge that they had accepted his vehicle in return – sent a message to Roman telling him that his car, which he had not seen for about two years, was ready to go. be picked up at a service center.
Puzzled, Roman emailed them and said he would pick him up. But Tesla would not have made an appointment for him to do so. They told him to call his bank instead. It got him nowhere.
Danny Roman used the Tesla app to find the whereabouts of a Model X he returned to the company in 2020.
Furious and curious about what had happened to the Model X over time, Roman logged into the Tesla app to see if he could learn anything about its whereabouts. It turned out that the car he had paid for was in a salvage yard just 11 miles from his home.
“After everything I’ve been through, I’m still a big fan of Tesla, Elon Musk and electric cars,” Roman told CNBC. “I hope my story reaches the powers that be at Tesla and that they make the necessary changes so this doesn’t happen to their future customers.”