BEIJING (CAIXIN GLOBAL) - Chinese electric vehicle (EV) firm Ora is facing mounting consumer backlash and potential legal action after it installed an old computer chip in one of its car models - despite telling buyers it came with a cutting-edge one worth around twice the price.

Buyers of the Ora Good Cat, which has a starting price of around 100,000 yuan (S$21,360), say that when they complained they were offered a package of store credit - including subsidised charging, free software updates and app memberships.

For many owners, that did not cut it. Now, some are demanding new chips for their cars or full refunds and compensation, saying the inferior processors have had a significant impact on their user experience, with some functions not working properly.

In a statement issued by a WeChat group of aggrieved Good Cat owners that was shared with Caixin, they accused the firm of being "evasive" in its response and demanded it explain how the situation occurred.

One lawyer who has been interacting with buyers in preparation for possible legal action says Ora's actions could constitute "consumer fraud". Ora, which initially responded to questions from Caixin, did not respond to that allegation.

Fishy chips

Claims emerged online last month from owners of the Ora Good Cat that the chip installed in the digital cockpits of their vehicles was an Intel processor released in 2016, and not the more advanced Qualcomm octa-core processor advertised by the carmaker.

As a result, some said, the electric hatchback's entertainment system's third-party app options were seriously limited.

One Good Cat owner told Caixin that he had been unable to update the Gaode navigation app, China's answer to Google Maps, and that the in-car voice assistant constantly malfunctioned.

In a statement published on its mobile app on Nov 22, Ora conceded that the Good Cat models that hit the market a year prior were not equipped with Qualcomm chips. Those were meant for future models, the firm said, adding that it had advertised the new chips "prematurely".

Great Wall Motor, Ora's parent company, later apologized for what it said was a marketing issue. "We would like to express our deep apologies to Ora Good Cat owners for the trouble brought about by the Ora Smart-cafe OS (operating system) advertising content," the company said in a statement on Dec 9, while adding that it has asked Ora to verify and correct the product information on its website.

Good Cat ads touting the Qualcomm chip have since been removed. Ora said it would offer buyers who placed their orders before Dec 9 a 7,200 yuan credit package that includes free updates to its in-car functions and membership extensions to its infotainment apps.

Additionally, those who had not previously owned an Ora car would also be given charging credits worth 10,000 yuan and extra warranty services.

The offer appears to have been poorly received. This week's statement by Good Cat-owners called on Great Wall Motor executives to give a thorough public account of how the old chips ended up in their vehicles. The statement also claimed the majority of car owners have yet to agree to a credit package.

It demanded Ora either replace the chips, refund the vehicles and pay compensation, or exchange the cars for another Great Wall Motor model.

Case to answer

Ms Lin Lihong, executive director at Queen & You Law Firm in Beijing, has been interacting with some of the firm's customers in three WeChat groups where they have been airing their grievances. The customers are from the provinces of Guizhou, Zhejiang and Jiangsu.

"In my opinion, this is a typical case of consumer fraud," Ms Lin told Caixin. "It was explicitly written in the car configuration files that a Qualcomm octa-core processor would be equipped in the vehicle. However, after deliveries were made, owners discovered that the vehicles were not consistent with what was advertised."

"The advertisement of the type of chip - which is a key configuration in a smart car - directly influenced the consumers' purchasing decisions," said Ms Lin, who said the owners are preparing to take the case to court. She said she had not been formally hired by any of them.

Older processors

In a since-removed ad for the Good Cat seen by Caixin, Ora had touted a "Qualcomm-powered in-car smart service platform" within its Ora Smart-cafe OS, referring to a platform launched in July last year that incorporates three systems - intelligent cockpit, intelligent driving and intelligent services such as cross-device connectivity.

The Qualcomm processor advertised referred to the Snapdragon SA8155P, a cockpit chip described by the United States chipmaker as "an integrated, next-generation automotive cockpit platform", and used in the in-car systems of models such as the Weltmeister W6, Geely Auto's Xingyue L and Xpeng's P5, Caixin understands, while the chip installed in the Ora Good Cats were the Intel A3940, released in 2016.

Qualcomm's 7-nanometer chip was released in 2018 and had begun launching in mass-produced vehicle models last year, said Mr Richard Wang, a senior analyst at the Gasgoo Auto Research Institute. He also noted that the chip is currently the first choice for smart cockpit chips among mainstream new energy vehicle companies.

"The chip's more powerful performance can boost the response speed of the in-car system, support more functions and screens as well as shorten over-the-air update times," Mr Wang told Caixin.

By comparison, the Intel A3940 is a quad-core chip that adopts a 14-nanometer process, and its performance lags behind its newer competitor and has a weaker compatibility in terms of application ecosystem, Wang said.

He noted, however, that Qualcomm's chips cost around twice as much as Intel's.

Hard to replace

An Ora spokesman said replacing the chips in the vehicles would be "difficult" because the processor needs to match the operating system and communication protocol of the vehicle.

Before it stopped responding to questions, the company also told Caixin it could not guarantee that future Good Cat models will be equipped with the Qualcomm chip since "production capacity is not sufficient".

Car owners who have already picked up their vehicles could be entitled to compensation that is equivalent to three times the amount paid during the purchase, Queen & You's Ms Lin said, citing Article 55 of the Consumer Rights Protection Law.

She also said that Ora could be subject to administrative punishment if it is found to have breached regulations that deal with misleading advertising under China's Advertising Law and Anti-Unfair Competition Law.

In the short term, the incident is likely to have a negative impact on the Ora brand and it could affect its sales, since most owners are still not satisfied with the solution offered to them, Gasgoo's Wang said.

He added that this is also likely to prompt an overall evaluation of product marketing and customer service at Great Wall Motor.

Ora, the only EV brand under Great Wall Motor, sold 16,136 cars last month, an increase of 39.2 per cent from a year earlier and a new monthly record, according to the latest data released by the company. Out of all the vehicles sold, 8,855 of them were Ora Good Cats, representing a month-on-month increase of 12.9 per cent.

This story was originally published by Caixin Global.