Another Class-Action Lawsuit Filed Against Tesla; Customers Say “they were misled by the company's exaggerated range claims”

By B.N. Frank

People continue to buy and drive Tesla vehicles despite the many issues that have been reported about them, some fatal. Of course, issues have led to investigations, recalls, and class-action lawsuits including this new one which may finally motivate Tesla fans to reconsider their allegiance.

From Ars Technica:

Angry Tesla customers sue firm over “grossly” exaggerated EV range

Three Tesla drivers launch class action, alleging fraud and false advertising.

Jon Brodkin

Tesla is facing a class-action lawsuit filed by customers who say they were misled by the company’s exaggerated range claims. The lawsuit was filed yesterday, days after a report revealed that Tesla exaggerated its electric vehicles’ range so much that many drivers thought their cars were broken.

“Tesla marketed its electric vehicles as having a grossly overvalued range in an effort to increase sales to consumers,” said the lawsuit filed in US District Court for the Northern District of California.

The lawsuit seeks class-action status to represent all people in California who purchased a new Tesla Model 3, Model S, Model Y, or Model X vehicle. The three named plaintiffs are James Porter, Bryan Perez, and Dro Esraeili Estepanian. All three bought Tesla cars in 2022.

The complaint said that when plaintiffs ordered their cars online or spoke to Tesla representatives about the car features, they were never warned that the advertised range was “grossly overestimated.” The plaintiffs would not have purchased a Tesla car at the prices they paid if the company “truthfully revealed that the advertised range was exaggerated and not based on normal driving conditions,” the lawsuit said.

The complaint says Tesla committed “violations of state consumer fraud statutes, fraud, negligent misrepresentation, breach of express warranty, breach of implied warranty, violation of California’s Song-Beverly Consumer Warranty Act, and unjust enrichment.”

“As a result of Tesla’s tactics and false advertising, Plaintiffs and Class Members suffered an injury in fact, incurred damages, and have been harmed by Tesla’s conduct,” the complaint said. They are seeking financial damages in the lawsuit, which was prepared by class-action law firm Milberg Coleman Bryson Phillips Grossman.

Cars “failed to accurately account for external factors”

The complaint cited testing that found three Tesla models fell short of their advertised ranges by an average of 26 percent. In addition to alleging false advertising, the lawsuit said that range estimates provided by Tesla vehicles during car trips fail to account for temperature and other factors that reduce range.

Testing by analytics firm Recurrent “determined that Tesla model vehicles still overwhelmingly calculated that they could still deliver nearly the advertised full range, regardless of external factors—with Tesla vehicles calculating that they could travel more than 90 percent of their advertised range,” the complaint said. “Put simply, Tesla vehicles failed to accurately account for external factors impacting battery performance and vehicle range, leading to a gross overestimate of the vehicle’s range.”

The lawsuit cites a recent investigation by Reuters. “Based upon information from those familiar with Tesla’s early vehicle software designs, the Reuters report explains that Tesla developed algorithms for estimating the range of its electric vehicles, which would display to drivers ‘rosy’ projections for the distance the vehicle could travel on a full battery,” the lawsuit said. “However, once the battery reached 50 percent capacity, the algorithm would change and begin showing the driver more realistic projections. This would cause the estimated range of the vehicle to fluctuate drastically from that point.”

“The decision to include these algorithms to present inflated range estimates came directly from Tesla’s chief executive officer, Elon Musk,” the lawsuit continued.

Reuters reported that Tesla became inundated with complaints from drivers who thought their cars were broken when the actual driving range was much lower than advertised. When these drivers scheduled service appointments to address their range problems, Tesla allegedly canceled the appointments because there was no way to improve the actual driving distance. The Reuters report said that in mid-2022, Tesla started routing range complaints to a “Diversion Team” that fielded up to 2,000 cases a week and “was expected to close about 750 cases a week.”

Tesla didn’t respond to a request for comment when we wrote about the exaggerated EV range claims last week.

Plaintiffs describe their Tesla problems

Tesla’s diversion team “ensured that customers’ Tesla vehicles could not be reviewed to determine whether their range complaints arose, in fact, from a malfunctioning battery,” the lawsuit said. “This effectively ensured that Tesla would not be required to potentially offer more warranty repair or replacement coverages. Tesla’s conduct, effectuated through the Diversion Team, violated and breached its warranties.”

The class-action plaintiffs say their experiences are similar to those described in the Reuters investigation. Porter, a resident of Petaluma in Sonoma County, bought a 2022 Tesla Model Y Performance vehicle for $72,000 and took delivery of the car in June 2022.

Shortly after getting the car, Porter’s charge was reduced from 100 percent to 40 percent on a two-hour trip despite the Tesla’s advertised range of 303 miles, the lawsuit said. The car “lost approximately 182 miles of range—despite only driving 92 miles,” the lawsuit said.

When he complained, a “Tesla representative explained that it was normal and expected that the Tesla vehicle’s range would drop below the advertised range with normal driving conditions and use of other vehicle features. The Tesla representative claimed that there was nothing wrong with the range Plaintiff Porter was experiencing in his vehicle, and the representative canceled the service appointment to review the vehicle and confirm whether the vehicle or battery was, in fact, malfunctioning.”

Perez, a resident of Lancaster in Los Angeles County, bought a 2021 Tesla Model 3 Long Range vehicle. He paid $60,000 for his car, which had an advertised range of 333 miles, the lawsuit said.

After getting the car in March 2022, “Perez fully charged his vehicle to 100 percent battery charge and took an approximately 90-mile trip to visit his parents. After returning home from the approximately 180-mile round trip, he noticed that his vehicle showed that it had roughly 10-15 percent charge remaining… his vehicle lost approximately 283 miles of range—despite only driving approximately 180 miles round trip,” the lawsuit said.

“Nothing was wrong with the vehicle”

After Perez complained about the car’s actual mileage, a Tesla rep told him the advertised range was calculated “without use of any other electronics in the vehicle (including, for example, use of air conditioning, use of the radio, etc.) and without accounting for weather, headwinds, temperature, traffic, amount of passengers, and other driving conditions,” the lawsuit said.

Previously, when Perez ordered the car, Tesla never told him that the estimated range “required the driver not to use other vehicle features (including other electronics), did not account for normal, expected driving conditions, or that it was exaggerated,” the lawsuit said.

Estepanian, a resident of Palmdale in Los Angeles County, bought a 2022 Tesla Model 3 Long Range vehicle for $62,000. He test-drove the car and spoke with a Tesla dealership representative, “discussing various features of the vehicle, including its range. However, at no point did the Tesla representative warn or explain to Plaintiff Estepanian that the advertised range did not account for normal driving conditions or that it was exaggerated,” the lawsuit said.

Estepanian’s round-trip commute is 140 to 150 miles, but his car “consistently loses approximately 189 miles of range during his daily commute,” the lawsuit said. After he complained, “Tesla representatives performed a mobile diagnostic on his vehicle and explained to him that nothing was wrong with the vehicle,” the lawsuit said.

The Tesla car’s advertised range “was one of the most important factors Plaintiff Perez considered when choosing to purchase his Tesla vehicle,” the lawsuit said. Although he is disappointed in the car’s performance, the complaint said that “Plaintiff Estepanian would consider buying another Tesla vehicle in the future if Tesla were ordered to truthfully reveal the actual range of the vehicle, based on normal driving conditions.”

Jon has been a reporter for Ars Technica since 2011 and covers a wide array of telecom and tech policy topics. Jon graduated from Boston University with a degree in journalism and has been a full-time journalist for over 20 years. Before Ars, he spent six years as a newspaper reporter and five years writing about technology for IDG’s Network World. To send Jon encrypted email, his public key is here; he can also be reached securely on Keybase.