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Elon Musk and Tesla are getting sued, again. This time, Musk and company are on the wrong end of a class action suit alleging odometer fraud on their Tesla Model Y. The suit alleges that Model Y odometers were off by as much as 117 percent in the months before its 50,000-mile warranty expired. Because the company ties its warranties to mileage, the inaccuracies could cause cars to fall out of warranty sooner than otherwise would happen.
The new case comes less than a year after Musk and Tesla were sued as part of a class action case claiming that Tesla falsified information about its vehicles’ driving range. Musk was previously fined millions by the South Korean government and admitted to inflating the ranges of Tesla vehicles.
But wait, there’s more! Musk and Tesla also faced a suit alleging massive insider trading. In that suit, Tesla shareholder Michael Perry alleged that “By disposing of $7,530,113,926 worth of Tesla stock in November and December 2022 while he was in possession of adverse, material non-public information, E. Musk exploited his position at Tesla, and he breached his fiduciary duties to Tesla.”
Tesla Customers Allege That Incorrect Odometer Readings Defraud Customers
Seems bad! But let’s get back to the case at hand. Road and Track reports that the current case alleges that “Tesla Inc. knowingly overstates the distances traveled in Tesla Vehicles, or at minimum tolerates substantial inaccuracy in distances traveled in Tesla Inc.’s favor.”
So, how exactly does the alleged fraud work? The case claimsv that Tesla’s odometer system uses a predictive model. But the model does not necessarily mimmick actual driving behaviors of vehicle owners. Nyree Hinton, the lead plaintiff in the case, claims he bought a pre-owned Tesla Model Y with approximately 36,772 miles on it. Hilton and his representation claim that the vehicle recorded an average of 2217 miles per month during his first six months of ownership. That put the car over the 50,000-mile mark, eclipsing the basic warranty threshold.
However, over the next year of ownership, Hilton claims that his Model Y’s odometer recorded an average mileage of 1,415 miles per month. Despite the reading, Hilton says that his commute actually increased during that time. Buthis odometer recorded an average of 800 fewer miles per month.
Hilton alleges that the car “consistently exhibited accelerated mileage accumulations of varying percentages ranging from 15% to 117% higher than plaintiff’s other vehicles and his driving history.”
Essentially, the predictive model used by Tesla odometers allegedly did not adequately adjust to changes in driving behaviors. That led to incorrect odometer readings and thus, the early expiration of warranties.
At this point, Musk and Tesla paying out damages from lawsuits has become the norm. And the world’s richest man has enough money that he wouldn’t even notice if they lost or settled. But at some point you’d think people would simply stop buying Teslas…right?