Tesla Has Illegally Monopolized Repair, Maintenance Markets for its Vehicles, Antitrust Class Action Says

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A proposed class action alleges Tesla has unlawfully monopolized, or attempted to monopolize, the market for replacement parts and repair services for its electric cars, forcing consumers to pay “supracompetitive” prices and endure “exorbitant wait times” to maintain and repair their vehicles. 

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The 39-page antitrust lawsuit says that although those who drive “traditional” vehicles historically have had available to them numerous options for repairs and maintenance, Tesla drivers, by comparison, have only one option: to schedule service at a Tesla dealer, where their car will be repaired using only Tesla original equipment manufacturer (OEM) parts. 

According to the case, this is because Tesla has leveraged its power in the electric vehicle market in the United States to “monopolize and restrain” the markets for Tesla repair services and parts, including by: 

• Designing vehicle warranties to “discourage Tesla owners from obtaining parts or services” anywhere else;
• Designing its vehicles such that maintenance and repairs require “access to diagnostic and telematic information accessible only through remote management tools” exclusively in Tesla’s possession; and
• Limiting access to Tesla “manuals, diagnostic tools, vehicle telematic data” and OEM parts. 

“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 complaint summarizes, stressing that Tesla’s grip on the repair and maintenance markets for its vehicles must be “enjoined and dismantled.” 

Further, the suit contests that Austin, Texas-headquartered Tesla should reimburse proposed class members for the amounts they “overpaid” for repair services and compatible replacement parts as a result of the automaker’s allegedly anticompetitive conduct. 

According to the filing, Tesla, during the first half of 2020, held a nearly 80-percent market share in the electric vehicle market in the United States. Even as other companies have emerged, Tesla still controls around 65 percent of the market, the suit says. 

The case emphasizes that there exist “no viable substitutes for Tesla Repair Services” and that such services are “not interchangeable with services designed for other vehicles.” Once a consumer buys a Tesla, the lawsuit relays, they are “locked into repair and maintenance services” specific to their car, which makes it difficult, if not impossible, for a consumer to accurately forecast how much repairs and maintenance might be prior to buying a Tesla vehicle. 

“Compounding this problem … Tesla misleadingly tells consumers that its [electric vehicles] are specifically designed to require little or no maintenance,” the complaint alleges. 

The filing relays that Tesla was the only major automaker to not sign a January 2014 memorandum of understanding between vehicle manufacturers and trade groups representing independent repair shops and aftermarket parts producers—a pact that “[created] a broad right to repair motor vehicles across the United States.” Although a number of states have begun to consider right-to-repair legislation, Tesla has “actively fought” these efforts, the case adds. 

The lawsuit looks to cover all persons or entities in the United States who paid Tesla for repair services or Tesla-compatible parts from March 2019 to the present. 

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