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Tesla settles class-action lawsuit over Autopilot delays

The deal still requires approval from a US district judge.

Hardware 2.0 vehicles eventually had their Autopilot features enabled, but it took a bit longer than some owners apparently expected.

Tim Stevens/Roadshow

In 2017, a class-action lawsuit was filed against Tesla over its Autopilot driver-assist system, and now, it appears the automaker has settled.

Tesla and Steve Berman, the lawyer representing the plaintiffs, have allegedly reached a settlement on the class-action lawsuit, Reuters reports, citing a federal court filing from late Thursday night. The details, including the settlement amount, are not yet public, and the settlement still requires the approval of a US district judge. In May, reports circulated that the settlement was around $5 million.

According to Tesla's statement, posted in full below, the automaker will reimburse each plaintiff differently, based on the time of purchase and delivery. It will expand its reimbursement to customers around the world, provided the initial settlement gains court approval.

The lawsuit was filed in 2017 on behalf of six Tesla Model S and Model X owners in different states. The vehicles in question are "Hardware 2.0" vehicles, which were introduced in 2016 with additional hardware and computing power than previous vehicles. While the vehicles came equipped with Tesla's semi-autonomous Autopilot system, many features remained disabled for some time as Tesla refined its system, despite owners being required to pay $5,000 for the option when ordering the vehicle. That's the root cause of this class-action lawsuit.

Berman's office did not immediately respond to a request for comment. Tesla's statement is as follows:

Since rolling out our second generation of Autopilot hardware in October 2016, we have continued to provide software updates that have led to a major improvement in Autopilot functionality. This has included an extensive overhaul of the underlying architecture of our Autopilot software that enabled a step-change improvement in its machine learning capabilities. 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 customer response to our recent Autopilot updates has been overwhelmingly positive, so we know we're on the right track.

That said, 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. 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. If the settlement is approved by the court, customers will receive different amounts depending on when they purchased and took delivery of their cars. Although the settlement is specific to customers in the US, if it is approved by the court, we've decided to compensate all customers globally in the same way. There's no legal obligation to do so, but it's the right thing to do.