Tesla Faces Legal Action Over Alleged Repair Monopoly

Tesla Facing Possible Legal Action (Tesla)

A US judge has given the green light for a class-action lawsuit against Tesla, allowing vehicle owners to pursue claims that the electric car maker has monopolized repair and parts markets.

Judge Trina Thompson ruled that owners can try to prove Tesla coerced them into paying high prices and waiting long times for repairs, threatening to void warranty coverage if they didn’t comply.

Tesla intentionally degraded repairs and parts (Tesla)

The lawsuit alleges Tesla violated federal and California antitrust laws by restricting access to repairs and parts, designing vehicles to require proprietary diagnostic and software updates, and limiting sales of original equipment manufacturer parts. Judge Thompson found evidence of a repairs monopoly and parts monopoly, as well as “tying” markets to coerce customers into unwanted purchases.

Tesla had argued the complaint was based on an “illogical theory” that the company intentionally degraded repairs and parts, jeopardizing its more profitable vehicle sales business.

However, the judge’s ruling allows the case to move forward, combining five lawsuits filed by vehicle owners who have paid for Tesla repairs and parts since 2019.

The case highlights Tesla’s unique business model, which differs from rivals by insisting on handling servicing and parts directly, rather than allowing independent shops and other companies’ parts.

The lawsuit seeks to hold Tesla accountable for alleged anticompetitive practices, which owners claim have resulted in higher costs and longer wait times for repairs.