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A lawsuit reveals that Tesla is tampering with its odometers to show more mileage. This ends the warranty earlier, saving the company $3.9 billion annually.
A class-action lawsuit filed against Tesla in California alleges that the company manipulates odometer readings on its electric vehicles through software. It prematurely expires warranties and costs owners thousands of dollars in repairs. This high-profile case has drawn comparisons to “Dieselgate,” the Volkswagen emissions scandal, raising concerns about its impact on the wider EV industry.
The lawsuit, led by plaintiff Nyree Hinton, claims that Tesla’s odometer system doesn’t solely rely on traditional mechanical or electronic measurements of distance travelled. Instead, it uses “predictive algorithms based on energy consumption and driver behaviours that inflate mileage readings.
Hinton, who bought a used 2020 Model Y, observed his vehicle accruing mileage at an unusually rapid rate, far. These readings caused his basic 50,000-mile warranty to expire well ahead of schedule in 18 months, leaving him with a $10,000 bill for a suspension repair he believes should have been covered.
The lawsuit suggests that these inflated readings can range from 15% to as high as 117% above actual mileage, significantly exceeding the industry’s generally accepted 4% margin of error for odometers.
Tesla has denied all material allegations in the lawsuit, with CEO Elon Musk reportedly dismissing the claims as “idiotic.” The company has also moved the case to federal court.
If the lawsuit is certified as a class action and a court finds in favor of the plaintiffs. Tesla could face significant financial penalties and be ordered to compensate affected vehicle owners, potentially amounting to billions of dollars. It could force Tesla to revise its odometer system, compensate affected owners, or extend warranties, impacting its financial models.
