In a significant victory for Tesla, a U.S. District Judge has dismissed an antitrust lawsuit accusing the company of forcing customers to pay exorbitant prices and endure lengthy repair waits by monopolizing the markets for vehicle maintenance and replacement parts.
U.S. District Judge Trina Thompson, presiding over the case in San Francisco, ruled that the plaintiffs failed to demonstrate that the alleged issues were not widely known at the time of their vehicle purchases or that they were unable to anticipate future maintenance costs.
Moreover, the judge found that Tesla did not coerce customers into using its services and parts solely because they had purchased Tesla vehicles.
While acknowledging that the plaintiffs had accused Tesla of misleading them about the true maintenance requirements and repair timelines for its electric vehicles, Judge Thompson emphasized that the plaintiffs had not provided evidence to support the claim that consumers were unaware of these purportedly inflated costs and lengthy wait times.
The judge also dismissed claims brought under California consumer protection laws. However, she granted the plaintiffs an opportunity to amend their complaint, which consolidated five separate lawsuits involving Tesla customers who had paid for repairs and parts since March 2019.
Lawyers representing the plaintiffs did not immediately respond to requests for comment.
In contrast to traditional vehicle owners who can choose from authorized dealerships, independent repair shops, and a variety of parts manufacturers, Tesla customers are restricted to using Tesla-approved service centers and Tesla-branded parts.
Tesla’s unique business model, which eschews the traditional dealership network and sells vehicles directly to consumers, has contributed to its success in the electric vehicle market. During the first nine months of 2023, Tesla generated $6.15 billion in revenue from services and other automotive operations, accounting for 9% of its total revenue of $71.6 billion. Vehicle sales accounted for the remaining 81%, or $57.9 billion, of Tesla’s total revenue.
The court case is titled Lambrix v Tesla Inc and is filed in the U.S. District Court for the Northern District of California under case number 23-01145.
