Tesla Hit With Class Action Suit: Users Claim Battery Drain After Software Updates

EV giant Tesla Inc TSLA is facing a class action lawsuit filed by four plaintiffs from California, Illinois, and Michigan. 

What Happened: The lawsuit, filed in the U.S. District Court for the Northern District of California, accuses Tesla of reducing car battery capacity and range through over-the-air software updates without warning to the customers.

According to the plaintiffs, the software updates in Tesla’s Model S and Model X vehicles decrease battery capacity by at least 20%, rendering some batteries completely unusable. As a result, users are forced to purchase new batteries at a cost of up to $15,000. 

Each of the four plaintiffs said they experienced a decline in battery capacity or a complete battery shutdown following a software update.

The lawsuit claims that Tesla’s actions are particularly detrimental to customers, as they have no control over the software updates imposed by the company. The plaintiffs are seeking compensation for battery replacement costs and an injunction to prevent Tesla from unilaterally updating software.

Attorney Steve Berman, representing the car owners, stated, “We believe Tesla defrauds consumers and abuses this feature of its vehicles’ design, and it’s time to show Tesla that it’s not above the law.”

Why It Matters: This is not the first time Tesla has faced such allegations. In 2019, the company settled a similar class action lawsuit without challenging the claims of software interference. 

In July 2021, Tesla agreed to pay $1.9 million to settle claims related to software updates affecting battery performance in 1,743 Model S vehicles, with each owner receiving $625.

The outcome of this new class action lawsuit will shed light on Tesla’s handling of software updates and potential repercussions for affected customers.

Price Action: On Friday, Tesla shares closed down 2.4% at $167.98 in the regular session, according to data from Benzinga Pro.

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