Tesla is facing a class action lawsuit in California accusing the company of manipulating the odometers of its vehicles. The lawsuit is based on allegations that Tesla uses algorithmically calculated mileage readings that are systematically inflated to cause warranties to expire prematurely, thus lowering repair costs and increasing margins.
Background of the Lawsuit
The plaintiff, Nyree Hinton, purchased a used Tesla Model Y in December 2022 with an odometer reading of 36,772 miles. Shortly thereafter, suspension issues arose, and during repair attempts, it was discovered that the odometer suddenly displayed nearly 72 miles daily – instead of the usual about 20 miles per day. This sudden increase caused the vehicle to exceed the 50,000-mile limit for the Basic Vehicle Limited Warranty, thus no further repairs were covered under warranty. After the warranty expired, the daily mileage reverted to a normal level.
Allegations of Odometer Manipulation
The complaint describes Tesla’s use of an algorithmic odometer system instead of a mechanical measuring device. Factors such as energy consumption, driving style, and acceleration data are taken into account. Allegedly, aggressive driving is assessed with lower efficiency, resulting in a higher calculated distance than was actually driven. The plaintiffs accuse Tesla of deliberately employing this method to minimize warranty coverage.
Possible Impacts
- For Customers: Premature expiration of warranties leads to higher repair costs and a faster depreciation due to increased mileage.
- For Tesla: In addition to possible compensation payments, there are risks of recalls to rectify the issue.
- For Trust: The case could significantly undermine trust in the Tesla brand.
- Stock Price: Already weakened, Tesla’s share price is showing a downward trend; it has decreased by about 47% since the beginning of the year and is approaching psychologically significant support levels below 200 euros.
Tesla has not yet issued a public statement. The class action lawsuit targets all buyers and lessees in California based on consumer protection laws.
Overall, this lawsuit represents a significant challenge for Tesla – both legally and economically – as it could have far-reaching implications for customer satisfaction as well as market value.