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Many of us have that relative—a parent, uncle, or older friend—who emphasizes the importance of finding a reliable mechanic. This is someone who can be trusted to fix your vehicle properly without charging an arm and a leg. Sadly, owners of Tesla vehicles are currently at a disadvantage, as the company faces allegations of maintaining a repair monopoly by restricting repairs solely to its own service centers. In a recent development reported by Reuters, a federal judge has allowed Tesla owners to move forward with a class-action lawsuit against the electric car manufacturer.
U.S. District Judge Trina Thompson, based in San Francisco, is providing Tesla owners the opportunity to demonstrate that the company has monopolized the repair and service market. A filing with the Securities and Exchange Commission (SEC) revealed Tesla reported $8.3 billion in repair revenue, which makes up 9% of its total revenue of $96.8 billion. This income stems from the company’s policy that seemingly compels customers to use its service centers rather than independent mechanics, threatening to void warranties if they do not comply.
Judge Thompson noted that repairs and diagnostics for Tesla vehicles necessitate specialized software that only Tesla service centers can provide, essentially mandating customers to visit these centers. Additionally, the company has not opened enough authorized service centers to adequately cater to its clientele. It also prevents original equipment manufacturers (OEMs) from distributing Tesla parts to third-party shops, which means that mechanics are unable to repair Teslas even if they wanted to, due to a lack of parts.
When a vehicle’s warranty expires, customers shoulder the full burden of repair costs, usually leading them to seek out more affordable independent mechanics. However, this option is unavailable for Tesla owners. Even those with active warranties are required to utilize the company’s pricier service centers for repairs not covered under warranty. The situation is further complicated by Tesla’s refusal to allow OEMs to sell parts to various shops, leaving DIY enthusiasts with no choice but to pay high prices for repairs conducted by Tesla.
This class-action lawsuit was initiated by five Tesla customers who have endured high repair costs since 2019. Initially dismissed by Judge Thompson last November, the case has now been allowed to proceed based on new evidence.
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