Market Analysis

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Tesla is facing a proposed class action lawsuit claiming that the company manipulates odometer readings on its electric vehicles to speed up the expiration of warranties, thus reducing its repair costs. The plaintiff, Nyree Hinton, alleges that the odometer readings on his 2020 Model Y, which had 36,772 miles when purchased in December 2022, were artificially inflated by at least 15%, based on his experience with other vehicles. Hinton claims this led to the early expiration of his 50,000-mile warranty, leaving him with a $10,000 suspension repair bill that he believes Tesla should cover.

Hinton argues that by inflating the odometer readings, Tesla accelerates the expiration of warranties, forcing consumers to buy extended warranties prematurely and increasing the company’s repair revenue. He is seeking compensatory and punitive damages for Tesla drivers in California, which could involve more than a million vehicles.

Tesla has not yet responded to the allegations but has denied any wrongdoing. The lawsuit was recently moved to federal court in Los Angeles after initially being filed in state court. Tesla has also faced previous legal challenges, including claims about inflating vehicle driving ranges. In March 2024, a federal judge ruled that those claims must be handled through individual arbitrations instead of as a class action. The case is Hinton v Tesla Inc, U.S. District Court, Central District of California, No. 25-02877.

Paraphrasing text from "Reuters" all rights reserved by the original author