Tesla and supplier Hoerbiger settle in court over Falcon Wing doors
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A Tesla logo hang on a building outside of a Tesla dealership in New York, U.S., April 29, 2016. REUTERS/Lucas Jackson/File Photo
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SAN FRANCISCO (Reuters) - Tesla Motors Co (NASDAQ: TSLA) and a U.S. subsidiary of Swiss auto supplier Hoerbiger have agreed to settle a lawsuit filed by the electric car maker over problems with a proposed hydraulics system for the luxury Model X's "falcon wing" doors, court records show.
Both parties have until Oct. 13 to file a joint statement as to the status of the settlement, terms of which have not yet been disclosed.
Tesla and Hoerbiger have delayed filing for a dismissal because certain conditions of the settlement will not be fulfilled until Oct. 4, according to an Aug. 18 filing by the companies.
Lawyers for the companies did not immediately return calls seeking comment.
Tesla claimed that a hydraulic system developed by Hoerbiger in 2014-2015 for use in the Model X doors, which open upwards rather than to the side, was riddled with deficiencies, making it an "unworkable engineering solution" that added costs and "more than a year of wasted efforts." It sued the company in January.
The lawsuit over the development of the show-stopping doors shone a spotlight on the intricacies of Tesla's engineering and the complex and dependent relationship with its suppliers. The Model X luxury SUV was, according to Chief Executive Elon Musk, "the hardest car to build in this world."
After its launch in September 2015, with a revised door design using electromechanical parts from a new supplier instead of hydraulic ones, many owners complained the doors did not latch properly or that the sensors malfunctioned.
Hoerbiger in January denied Tesla's claims, saying it had fulfilled the company's specifications and was not responsible for the electronic controls related to the doors' symmetry and overheating problems cited by Tesla in its complaint. It said it was negotiating with Tesla over reasonable compensation.
Tesla had originally sought punitive damages for negligence from Hoerbiger before dropping that claim.
Musk claimed not to know of Hoerbiger when asked by Reuters during a first-quarter results conference call in May.
In its lawsuit, Tesla said Hoerbiger's proposed system was prone to overheating, making the doors inoperable, and leaked oil. The doors sagged and did not open properly, it said.
Moreover, "unanticipated complexity" in integrating the system with the car added to assembly time and increased costs above Tesla's expectations, it said.
(Reporting by Alexandria Sage; Editing by Joseph White and Richard Chang)
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