Tesla Accused of Hacking Odometers to Rip Off Customers

Tesla, the electric vehicle giant once hailed as a pioneer in sustainable energy, is facing yet another controversy that threatens to further erode its reputation. A class-action lawsuit filed in February alleges that the company has been manipulating odometer readings to avoid repair responsibilities and warranty agreements, leaving customers with questionable mileage numbers.

The plaintiff, a California resident who purchased a used 2020 Model Y with 36,772 miles, noticed an unusual spike in average daily miles driven despite a consistent driving routine. The discrepancy became apparent when the vehicle's warranty expired ahead of schedule after reaching the 50,000-mile threshold. However, upon further inspection, the "reported average daily miles" suddenly dropped off, aligning more closely with historical data from other vehicles.

According to the lawsuit, Tesla Inc.'s odometer system relies on predictive algorithms, energy consumption metrics, and driver behavior multipliers that manipulate and misrepresent actual mileage traveled by Tesla vehicles. This tactic allegedly accelerates the rate of depreciation of vehicle values, expands warranty expiration dates, and encourages customers to purchase extended warranties.

This news comes at a particularly challenging time for Tesla. Sales have plummeted worldwide due to CEO Elon Musk's erratic behavior, his embrace of far-right extremism, and the gutting of federal agencies. Investors are also growing increasingly disillusioned with the company's long-term prospects, leading to a sharp decline in its share price. In fact, Tesla stock has formed a "death cross," a chart pattern indicating that a stock's short-term moving averages have crossed below its long-term averages, resulting in an over 34 percent year-to-date loss.

Rapid depreciation has become a major issue for Tesla, with used vehicles losing value three times faster than those from other manufacturers. The latest lawsuit is just another layer of scrutiny on a company already reeling from public backlash and financial woes.

While this allegation may not be new to Tesla owners, who have long reported discrepancies between indicated mileage and actual miles driven, it's still a concerning development for the company. In 2023, Reuters investigated Tesla's dashboard readouts, finding that they had been rigged to provide "rosy" projections of vehicle range before needing recharging.

Drivers complained about getting fewer miles out of their cars' batteries than claimed by Tesla. The investigation revealed that the company had set up a "diversion team" to divert calls from complaining customers and deceive them into running remote diagnostics scans, which often determined that the battery was fine.

The latest lawsuit's impact on Tesla's reputation is still uncertain, but it serves as another reminder of the company's struggles in addressing customer concerns and maintaining transparency. As investors wait with bated breath for its first-quarter earnings report, one thing is clear: Tesla needs to address these allegations head-on if it wants to salvage its reputation and regain the trust of its customers.

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