Slide 1. Introduction.
The class develops the manipulation of mileage to extinguish the warranty early on the electric vehicle, to avoid the vehicle manufacturer's repair costs when the vehicle is under warranty, and the implications on fleet management.
- Mileage manipulation.
A lawsuit claims Tesla cheats with odometer, recording more distance as the end of the warranty nears.
Tesla is under suspicion of manipulating the mileage displayed on board its electric cars. This is the belief of several customers of the brand who have joined together and filed a class action lawsuit in California, reports The Street. Several U.S. drivers claim in the lawsuit that the number of kilometers driven indicated by their Tesla appears to be much higher than the actual number of kilometers they perform.
The allegations are serious. Tesla has allegedly set up a calculation system that overestimates the distance actually traveled by its vehicles. The usual thing is to remove kilometers from a car to increase its resale value, but why increase the mileage of your cars?, so that the warranty runs out as soon as possible.
The accusation is not limited to a one-off error, but raises a systematic pattern: Tesla would have designed its mileage calculation system to benefit the company, reducing its warranty obligations and encouraging the contracting of extended coverages. According to the lawsuit, this not only disadvantages users, but also constitutes an unfair business practice. The lawsuit has been filed as a class action, seeking to represent a broader class of affected parties, potentially more than one million homeowners in California.
- End the warranty sooner to save on costs.
As a general rule, a car computes miles driven thanks to a sensor located in the gearbox or wheels that records wheel rotations and converts it into kilometers. This has not changed, either via a cable and gears before the electronics, or via a sensor that sends an electrical signal, it is the wheel rotations that determine the distance a car travels.
It's all a function of wheel diameter, of course, but to give an example, 1,050 rotations of a wheel equals one kilometer. Apparently, Tesla wanted to reinvent the wheel and uses an algorithm that reads energy consumption and predictive models to estimate the distance.
"Tesla Inc. employs an odometer system that uses predictive algorithms, energy consumption metrics and driver behavior multipliers that manipulate and misrepresent the actual mileage traveled by Tesla vehicles," the lawsuit reads.
In other words, the car could show 100 kilometers driven, while the actual mileage, as measured by GPS, could be only 90 kilometers. And this is not a one-off discrepancy. According to the complainants, the accumulated differences may exceed several thousand kilometers in the medium term.
This situation has been confirmed by several users who have cross-checked their odometer data with those of independent navigation tools, and even with their travel history in the Tesla app.
For example, one affected person explains in the lawsuit that, "from December 14, 2022 to February 6, 2023, they averaged 55.54 miles per day, but between March 26, 2023 and June 28, 2023, this jumped to 72.53 miles per day, just as their Model Y was approaching its warranty expiration. The owner estimates that the average mileage should have been approximately 20 miles less per day due to his consistent routine during this time."
What might seem like a technical detail actually has far-reaching implications. In the U.S., as in Europe, Tesla warranties have two limits, a time limit and a mileage limit. In Tesla's case it is "4 years or 80,000 kilometers, whichever comes first", 50,000 miles in the US.
If a car's component breaks down at 79,000 kilometers, it could be covered under warranty. At 81,000 kilometers, it is no longer covered. And the repair has to be borne by the customer. Consequently, an overstatement of mileage could result in improper denial of warranty repair coverage.
In the lawsuit, a California man who purchased a used 2020 Tesla Model Y, with 36,772 miles noticed "peculiar patterns in mileage accumulation" during a time when he was constantly taking the car in for repairs due to suspension problems.
"As a result of this increased mileage accumulation, plaintiff's Basic Warranty expired well ahead of schedule, when the odometer read that the vehicle had reached 50,000 miles," the lawsuit reads. Tesla allegedly told the plaintiff that his vehicle was no longer under warranty and refused to continue repairing his vehicle's suspension problem.
So the question is simple, especially for a brand with models whose reliability is constantly questioned, from the Model 3 to the Cybertruck: is Tesla deliberately trying to shorten the contractual warranty on its cars to limit after-sales service costs?, some users would have been encouraged to buy warranty extensions, thinking that their car was approaching the fateful 50,000-mile threshold, when in fact they had not covered that many miles.
- Implications for fleet management.
The main consequence is an increase in costs, because if there is a breakdown that is not under warranty, the cost of repair must be assumed.
The more kilometers a vehicle has, the lower the residual value.
It may incite to contract the extended warranty before time or mileage.
If a fleet has many vehicles in which this bad practice occurs, thousands of kilometers have not really been traveled, performing more maintenance than should be done, increasing the costs, and the vehicles are less time available to provide the service.
In the fleets that establish their rates by the kilometers traveled such as renting, car rental, cabs or mobility are charging their customers for kilometers that have not been traveled, and these customers can accuse us of fraud by demanding compensation.
On the other hand, if we are clients of this type of fleets, we are overpaying for the kilometers that we have not driven, and we can demand a compensation.
For example we have a vehicle leasing for 15,000 kilometers per year, and we pay a penalty per kilometer exceeded over 15,000 kilometers, if the actual kilometers are less than 15,000 kilometers, but the kilometers measured by the vehicle is greater than 15,000 kilometers, we are paying a penalty that we should not, increasing the costs.
If the fleet has Tesla vehicles it is recommended to monitor the actual realized mileage with the one measured by the vehicle to check that this bad practice occurs.
It is not a generalized bad practice by electric vehicle manufacturers, but if they use a system the same or similar to Tesla's, using algorithms and predictive models this bad practice can occur.
It is recommended to know how the vehicle measures the distance traveled, you can ask directly to the vehicle manufacturer, or it can be in the instruction manual of the vehicle.
It is recommended to measure the actual mileage with that measured by the vehicle, especially when the expiration of the warranty is approaching.
This can be done using GPS external to the vehicle, or hiring an external laboratory to measure and certify the actual distance traveled.
This bad practice is a fraud of the vehicle manufacturer, and it is recommended to go to court to seek compensation, if it is happening in our fleet vehicles, we recommend the certification of an external laboratory as proof.
It is necessary to search on the Internet or media if there are this type of bad practices in other users and/or fleets, in case we have affected vehicles, and group together to file a class action.
Slide 3. Thank you for your time.
The class has developed the mileage manipulation to extinguish the warranty early in the electric vehicle, to avoid the vehicle manufacturer the costs of repairs when the vehicle is under warranty, and the implications in fleet management, see you soon.
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