Tesla Accused of Hacking Odometers to Rip Off Customers

Tesla has been accused of manipulating the odometers in its cars to avoid repair responsibilities and warranty agreements.

As The Street reports, a class-action lawsuit filed in February claims that Tesla has been trying to dodge warranty-related obligations by intentionally overstating the distances its vehicles travel.

The plaintiff, a man in California who bought a used 2020 Model Y with 36,772 miles, noticed an "abnormal spike in average daily miles driven" — despite a "consistent driving routine" — while he was taking it to the shop multiple times for suspension repairs.

As a result, his warranty expired after reaching the 50,000-mile threshold "well ahead of schedule," according to the lawsuit. However, after the expiry, the "reported average daily miles" suddenly dropped off, becoming "more closely aligned with his historical data on his other vehicles," making him suspicious that the EV maker was fudging the numbers.

"Tesla Inc. employs an odometer system that utilizes predictive algorithms, energy consumption metrics, and driver behavior multipliers that manipulate and misrepresent the actual mileage traveled by Tesla vehicles," the lawsuit reads. "In so doing, Defendants can, and do, accelerate the rate of depreciation of the value of Tesla vehicles and also the expiration of Tesla vehicle warranties to reduce or avoid responsibility for contractually required repairs as well as increase the purchase of its extended warranty policy."

The news couldn't come at a worse time for the carmaker. Sales have tanked worldwide in large part due to CEO Elon Musk's abhorrent behavior, embrace of far-right extremism, and gutting of the federal government.

Investors have also had enough. Tesla's share price formed a "death cross" this week, a chart pattern when a stock's short-term moving averages cross below its long-term averages.

Tesla stock is down over 34 percent year to date, indicating widespread disillusionment and uncertainty over the company's long-term future.

Rapid depreciation has become a huge problem, with the value of used Teslas tanking three times faster than any other brand.

In short, a class-action lawsuit accusing it of fudging the odometer numbers is the last thing the carmaker needs — especially as it braces for a likely disastrous first-quarter earnings report.

In many ways, what the plaintiff is alleging in the suit is nothing particularly new. Tesla owners have long noticed an unusual discrepancy between the mileage indicated on the odometer and the actual miles driven.

"Is Tesla inflating odometer to show more range, ding lessors with over miles and duck repairs under warranty?" one Reddit user wrote in a post last year. "As I return my leased Model Y I noticed the odometer is off by 20 percent vs my Lexus RZ."

And it's not just "dodgy" mileage numbers.

In a 2023 investigation, Reuters found that Tesla had "rigged the dashboard readouts in its electric cars to provide 'rosy' projections of how far owners can drive before needing to recharge."

Drivers noticed they were getting far fewer miles out of their cars' batteries than what the EV maker had claimed.

According to the investigation, Tesla had set up an entire "diversion team" to divert calls from complaining customers and deceive them into running a "remote diagnostics" scan, which more often than not determined that the battery was fine.

While it remains unclear how the latest lawsuit will play out, it's certainly not a good look for a company whose brand has already been severely tarnished by its CEO's antics.

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