Tesla Knew It Installed Defective Parts In Its EVs. It Charged Customers For Repairs Anyway

Reports about Tesla’s questionable build quality have popped up occasionally over the years, but a new Reuters investigation reveals that the American automaker actively sought to hide the proverbial trash under the rug.

It blamed customers for vehicle abuse and prior damage to suspension components and denied responsibility for parts failures even though it knew some components were faulty, to begin with.

We already mentioned the investigation in yesterday's Critical Materials piece which also included mentions of Canada's new ZEV rules and China's need for EV production expansion, but we figured some more in-depth coverage couldn't hurt. Plus, we'd love to hear from you, our great readers, if you ever found yourselves in a similar situation to those described below.

The report begins with the disconcerting story of a United Kingdom customer who bought a brand-new 2023 Tesla Model Y. Just a day after getting delivery of his first-ever EV, he was driving the shiny crossover at low speed into their neighborhood–with his wife and daughter in the car–when he suddenly lost steering control while making a slow turn.

The EV’s front-right suspension had collapsed after a total of 115 miles had been driven since being built.

According to a detailed repair estimate obtained by Reuters, the Model Y needed nearly 40 hours of labor to repair the suspension and replace the steering column, among other fixes, bringing the total cost to over $14,000 (£11,247.48).

Tesla refused to cover the repairs under warranty, blaming the mishap on “prior” damage.

This is just one case where suspension troubles affected cars that had barely rolled off the assembly line, but also Tesla-branded EVs that were less than two years old.

Another harrowing experience was that of a Model 3 customer in the United States. With less than 15,000 miles put on the odometer in approximately one year of ownership, the EV ended up at a Tesla repair center in Brooklyn, New York, after an accident. The technician wrote on the repair report: “Front wheel fell off while driving on Autopilot at 60 mph.”

The Reuters investigation doesn’t mention if the car was repaired, but judging from the outcome, we’d argue the customer refused to pay for the fix, seeing how the EV was sold at auction a few months later without its front-right wheel.

Between January 2021 and March 2022, Tesla replaced upper control arms on roughly 120,000 cars globally, Reuters said in its analysis, with the American automaker paying for most of the repairs under warranty. However, roughly 31,000 owners of older cars who experienced suspension failures had to pay for the repairs out of pocket.

In Norway, a country that’s known for leading the pack in the EV adoption race, former Tesla service managers and technicians said they were told by the manufacturer to push the cost of the frequent and repeated failures onto customers to cut warranty and goodwill repair costs starting in 2017.

“Now, we have to quit talking bullshit,” one service manager who claims was forced out of the company said. A service technician quit his job just one year over the issue. “I wasn't doing anything else than just constantly changing those control arms,” he said for Reuters.

Besides control arms, Tesla had problems with half shafts and steering columns, with customers sometimes having to pay for repairs over $4,000 even though the cars were still under warranty.

Service managers, technicians, and engineers flagged design issues and faulty parts over the years, and to its credit, Tesla redesigned the Model S front aft link four times. However, it seems like the redesigned part only ended up in EVs bound for China, a country that forced the Austin-based automaker to do a recall after four years of Tesla dragging its feet.

In the United States, the company told regulators that the failures were caused by “driver abuse” and instructed its service centers to use the same explanation with customers experiencing aft-link failures, the Reuters investigation shows.

The reason for all this questionable tactic? Money, as always. During the fourth quarter of 2018, Tesla’s repair business lost $263 million because of the high volume of warranty and goodwill repairs, which was nearly double the company’s quarterly profit of $139 million. On average, the company paid almost $500 for repairs on every Tesla model in operation at the time.

While cutting unnecessary costs should be a key concern of any company in the world, accusing customers of damaging cars just so the bank balance stays at a healthy level shouldn’t.