Tesla Owners Fight Back: Lawsuit Alleges Elon's Company Forced High Pay And Long Wait Times For EV Repairs

A U.S. judge has revived a lawsuit dismissed last November, allowing Tesla vehicle owners to pursue a proposed class action accusing the electric car company for monopolising the repair and parts markets of electric vehicles.

Trina Thompson, a federal judge in San Francisco, ruled Monday that Tesla owners can sue, alleging the company pressured them into paying inflated repair costs and enduring long wait times by threatening to void their warranties.

Tesla Faces Lawsuit Over Repair Practices

Tesla owners allege the company's practices violate federal and California antitrust laws by coercing them into using Tesla's repair services. Judge Thompson found evidence supporting a repair monopoly, citing Tesla's limited authorised service centres and its design choices that restrict diagnostic and software updates to Tesla itself.

Additionally, the judge cited limitations on original equipment manufacturers selling parts to anyone besides Tesla and Tesla's own restricted sales of parts directly to consumers. Ironically, despite Tesla emphasising the Cybertruck's American origin, a recent discovery revealed a Mexican-made component in its steering wheel system.

Furthermore, Thompson found evidence of illegal "tying," a practice where Tesla allegedly forces customers to pay for unwanted services or parts along with desired purchases. Tesla denied the allegations, calling them an "illogical theory" that would hurt their core business of selling cars.

The plaintiffs argue that the Austin, Texas-based company, unlike its competitors, insists on handling all servicing and parts internally, restricting owners' ability to use independent repair shops and third-party parts.

Matt Ruan, a lawyer for the plaintiffs in the combined Tesla repair lawsuit, which merged five separate complaints from vehicle owners who paid for repairs and parts since March 2019, said they were pleased with the court's well-reasoned and thoughtful decision and looked forward to the next phase of the case.

The case of Lambrix v Tesla Inc., filed in the U.S. District Court, Northern District of California (Case No. 23-01145), specifically contests Tesla's alleged monopoly on repairs and parts. This strategy is seen as an attempt to restrict competition and inflate costs for owners.

This focus on in-house service is particularly relevant considering Tesla's significant revenue stream from services and other automotive revenue, which reached $8.3 billion in 2023, accounting for 9% of its total revenue.

Tesla Set To Unveil New Models

In a contrasting turn of events, Tesla CEO Elon Musk unveiled plans for three new Tesla models during Thursday's annual stockholder meeting. This news came after Musk first teased the arrival of new Tesla products in January.

Tesla is facing pressure to deliver new and exciting products. The company's vehicle lineup has been criticised for stagnation, and sales figures have slowed. Musk acknowledged this need by showcasing a slide with illustrations of three shrouded vehicles but offering no specifics about their features or release dates.

"Obviously we've got some new products that we're working on under the covers," Musk said. "I think these are going to be pretty special." Speculation swirls around the new Tesla models. With the company's planned robotaxi reveal set for August 8, InsideEVs.com reports that one of the shrouded vehicles could be the highly anticipated self-driving car.

Tesla announced in April that it's expediting the launch of new models, including more affordable options, to address slowing sales. These are expected to arrive by late 2024 or early 2025, potentially undercutting the suspense surrounding the recently teased vehicles.

Tesla's Master Plan Part 3, released last April, included shadowy silhouettes (Timestamp 9:55) of two undisclosed vehicles. The document itself categorised Tesla's equivalents of a compact car, commercial/passenger van, and even a bus as "TBD."

This earlier tease and the recent shrouded trio suggest that Tesla is indeed working on expanding its offerings beyond its current line-up.