Tesla (TSLA) has been embroiled in controversy over the past few months.
Since Tesla CEO Elon Musk joined the Trump administration in January, heading the Department of Government Efficiency (DOGE), many consumers have turned against the automaker due to Musk’s recent efforts to shrink the government.
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This controversy may have affected Tesla’s sales over the past few months. According to a recent report from Cox Automotive, Tesla’s U.S. sales declined by almost 9% year-over-year during the first quarter of 2025.
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Amid the shrinkage in sales, Tesla faces another significant problem. The electric vehicle company is facing a class-action lawsuit for allegedly using a sneaky tactic to avoid fulfilling obligations in warranty agreements attached to its customers’ vehicles.
Tesla accused of manipulating tech in vehicles
The lawsuit, filed on Feb. 7, highlights that Tesla’s warranties on vehicles are capped by mileage and are supposed to “cover repairs and replacements necessary to correct defects” in parts that it manufactures or supplies.
However, Tesla allegedly ”knowingly overstates the distances traveled in Tesla vehicles” by manipulating odometers, allowing the company to dodge repair responsibilities tied to warranties.
A Tesla Model Y equipped with its Level 2 autonomous driving capabilities.
Image source: NurPhoto/Getty Images
“Tesla Inc. employs an odometer system that utilizes predictive algorithms, energy consumption metrics, and driver behavior multipliers that manipulate and misrepresent the actual mileage travelled by Tesla vehicles,” reads the lawsuit. “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 plaintiff in the lawsuit, a California man who purchased a used 2020 Model Y Tesla vehicle with 36,772 miles on it, noticed “peculiar patterns in mileage accumulation” during a time when he was consistently taking the car in for repairs due to issues with its suspension.
He noticed an “abnormal spike in average daily miles driven,” despite having a “consistent driving routine” that involved “a short commute to work and occasional visits to the gym and local restaurants.”
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In the lawsuit, he claims that this routine should have averaged 20 miles per day; however, the vehicle’s odometer estimated 72.35 miles per day.
“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,” reads the lawsuit.
Tesla allegedly told the plaintiff that his vehicle was no longer under warranty and refused to further repair his vehicle’s suspension issue.
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Shortly after his Basic Warranty expired, he noticed “a decline in the vehicle’s reported average daily miles” despite driving longer commutes. He claimed that the decrease in miles was “more closely aligned with his historical data on his other vehicles” and commute at that time.
The plaintiff is accusing Tesla of “systemic inaccuracies and fraudulent business practices” and is suing for an unknown amount of damages.
“These systemic inaccuracies and fraudulent business practices undermine the value of Tesla vehicles and their warranties, erode consumer trust, and suggest intentional practices designed to financially benefit Tesla Inc. at the expense of its customers,” reads the lawsuit. “By tying warranty limits and lease mileage caps to inflated ‘odometer’ readings, Tesla increases repair revenue, reduces warranty obligations, and compels consumers to purchase extended warranties prematurely.”
Tesla owners have previously flagged similar odometer issues
The lawsuit comes after additional Tesla owners recently took to Reddit to flag inaccurate readings on their vehicle’s odometers.
“Is Tesla inflating odometer to show more range, ding lessors with over miles and duck repairs under warranty? As I return my leased Model Y, I noticed the odometer is off by 20% vs. my Lexus RZ,” said one Tesla owner in a Reddit post.
“Had my MY for 6 months and just realized my odometer seems off [from] what it should be,” wrote another Tesla owner.
“I’m leasing the Model 3 and disappointed at how it reports miles. My 16-mile drive to work was clocked as 21 miles. I’ve only owned it 5 months and it thinks I’ve done 6,000 miles already,” flagged another.
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