Tesla Class Action Alleges Anti-Competitive Repair And Parts Conduct

A ‘right to repair’ antitrust class action has been launched against Tesla in the USA, alleging the EV manufacturer is unlawfully supressing competition for maintenance and replacement parts of its electric vehicles.

According to the lawsuit lodged in the United States District Court in northern California, Tesla’s alleged conduct forced customers to pay supracompetitive prices – pricing above what can be sustained in a competitive market – and suffer exorbitant wait times to maintain and repair their Tesla vehicles.

Unlike owners of vehicles with internal combustion engines who have multiple options for maintaining and repairing their cars after purchase, and the choice of using OEM or aftermarket replacement parts, the lawsuit says Tesla owners effectively have only the one option of scheduling service at Tesla or within the limited network of Tesla-approved service centres, where their car will be maintained or repaired using only Tesla OEM parts.

This is because, the lawsuit alleges, Tesla leverages its power in the US EV market to monopolise and restrain the markets for Tesla Repair Service and Tesla-Compatible Parts. Tesla does this by, among other things:

  • Designing its vehicle warranties and related policies to discourage Tesla owners from obtaining parts or services anywhere other than Tesla
  • Designing its vehicles so that maintenance and repairs require access to diagnostic and telematic information accessible only through remote management tools exclusively accessed by Tesla
  • Limiting access to its manuals, diagnostic tools, vehicle telematic data, and original equipment manufacturer replacement parts.

The lawsuit further alleges that:

  • Tesla further leverages its market power in the Tesla repair service market to maintain its monopoly in the Tesla-compatible parts market, and vice versa.
  • As a result of this anticompetitive course of conduct, Tesla has prevented independent providers from entering the Tesla repair services market, prevented its OEM parts manufacturers from producing Tesla-compatible parts for anyone other than Tesla, and prevented market entry by non-OEM, Tesla-compatible parts manufacturers.

The plaintiff is seeking the dismantling of Tesla’s allegedly unlawful monopoly of the repair services and compatible parts markets, and that the company be ordered to make its repair manuals and diagnostic tools available to individuals and independent repair shops at a reasonable cost. It also asks for those attached to the action to be reimbursed of the amounts overpaid, and seeks declaratory and injunctive relief, treble damages, costs, and attorneys’ fees.