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Tesla must face owners' lawsuit claiming it monopolizes vehicle repairs and parts
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Tesla must face owners' lawsuit claiming it monopolizes vehicle repairs and parts
Jun 18, 2024 9:35 AM

June 18 (Reuters) - A U.S. judge said Tesla

vehicle owners can pursue a proposed class action accusing

billionaire Elon Musk's electric car company of monopolizing

markets for repairs and parts, breathing new life into a lawsuit

she dismissed last November.

U.S. District Judge Trina Thompson in San Francisco ruled on

Monday that owners could try to prove that Tesla coerced them

into paying high prices and suffering long waits to have their

vehicles fixed, under fear of losing warranty coverage.

Owners said Tesla's alleged coercion violated the federal

Sherman antitrust law and California antitrust law.

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.

Evidence of a parts monopoly included restricting original

equipment manufacturers from selling "to anyone other than

Tesla," and Tesla's selling parts to consumers only on a limited

basis, the judge said.

Thompson also found evidence Tesla's alleged illegal "tying"

of various markets "coerces customers into undesired purchases."

Tesla and its lawyers did not immediately respond to

requests for comment on Tuesday.

They contended that the complaint was based on an "illogical

theory" that Tesla intentionally degraded repairs and parts,

jeopardizing its far more profitable business of selling and

leasing vehicles.

Matt Ruan, a lawyer for the plaintiff owners, said they were

pleased with the court's well-reasoned and thoughtful decision,

and looked forward to the next phase of the case.

The complaint combined five lawsuits by vehicle owners who

have paid for Tesla repairs and parts since March 2019.

They said the Austin, Texas-based company differed from

rivals by insisting it handle servicing and parts, rather than

let owners use independent shops and other companies' parts.

Tesla sells its vehicles directly to consumers, instead of

through franchisees.

It reported $8.3 billion of services and other automotive

revenue in 2023, accounting for 9% of its $96.8 billion total

revenue. Vehicle sales totaled $78.5 billion.

The case is Lambrix v Tesla Inc ( TSLA ), U.S. District Court,

Northern District of California, No. 23-01145.

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