Tesla Class Action: Lawsuit Alleges Monopoly on Repairs and Parts

A judge has given the green light to Tesla drivers who want to pursue claims that the automaker monopolizes the market for repairs of their electric vehicles. 

On June 15, U.S. District Judge Trina Thompson ruled that Tesla vehicle owners could pursue a proposed class action accusing the company of monopolizing markets for repairs and parts, Reuters reports.

In an order filed in a California federal court, Judge Thompson said the plaintiffs had plausibly shown that Tesla coerced them into paying high prices and suffering long waits to have their vehicles fixed. 

The drivers said they were coerced through the fear of losing their warranty coverage if they didn’t use a Tesla repair provider.

Thompson found evidence of a repairs monopoly in Tesla's alleged refusal to open enough authorized service centers, and its designing vehicles to require diagnostic and software updates that only the company could provide, she said. 

The plaintiffs are suing for violations of the federal Sherman antitrust law and California antitrust law.

Tesla's Tight Grip on Repairs: Lawsuit Exposes Alleged Parts Restrictions and High Prices

The class action complaint combines five lawsuits by vehicle owners who have paid for Tesla repairs and parts since March 2019.

As opposed to other electric vehicle manufacturers, Tesla insists on handling servicing and parts, and does not let owners use independent shops and other companies' parts for repairs, they allege.

Tesla cashed in on its parts monopoly by selling parts to consumers only on a limited basis, and by restricting original equipment manufacturers from selling "to anyone other than Tesla," the plaintiffs allege.

The company reported $8.3 billion of services and other automotive revenue in 2023, accounting for 9% of its $96.8 billion total revenue, according to public filings. Vehicle sales totaled $78.5 billion.

Tesla's Legal Troubles Extend Beyond Repair Monopoly

Meanwhile, a series of lawsuits have been filed against Tesla due to its Autopilot features, with some alleging violations of product liability laws, in cases where people were injured or even killed. In a verdict returned in April 2023, a jury found that Tesla was not responsible for a 2019 crash that injured driver Justine Hsu. In October 2023, another jury found that Tesla was not responsible for the 2019 death of driver Micah Lee, who was allegedly using Autopilot at the time of the crash.

However, in November last year, a Florida judge found there was reasonable evidence that Elon Musk and other Tesla managers knew Autopilot was defective and that a case involving the fatal crash of Stephen Banner while using this feature could go to trial. 

In other cases, lawsuits were filed alleging misleading advertising in regard to Tesla’s Full Self-Driving (FSD) capabilities. In September 2022, five plaintiffs brought a class action lawsuit against Tesla, alleging that Tesla had made “misleading and deceptive” statements about its Autopilot and Full Self-Driving capabilities

Case Details

• Lawsuit: Lambrix v. Tesla Inc.
• Case Number: 3:23-cv-01145-TLT
• Court: U.S. District Court for the Northern District of California

Plaintiffs' Attorneys

• R. Alexander Saveri, Geoffrey C. Rushing, Matthew D. Heaphy, and David Y. Hwu (Saveri & Saveri Inc.)