A U.S. judge dismissed an antitrust lawsuit against Elon Musk’s electric car company, Tesla (TSLA.O). The lawsuit claimed that Tesla had monopolized the auto repair and replacement parts markets, causing customers to pay exorbitant costs and endure lengthy wait times for repairs.
U.S. District Judge Trina Thompson of San Francisco ruled on Friday night, saying that the plaintiffs in the proposed class action did not prove that the alleged issues were “not generally known” at the time of purchase or that they could not estimate the costs of maintaining their cars.
She said that consumers could not demonstrate that Tesla forced them to utilize its products or services just because they had first purchased their cars. “To be sure, plaintiffs allege that defendant misled them about how much maintenance its EVs are designed to need and how long that maintenance ought to take,” wrote Thompson. “But nowhere do plaintiffs allege that consumers are, in fact, unaware of the supposedly supracompetitive prices and exorbitant wait times.”
Under California’s consumer protection regulations, the judge also rejected the claims. Customers, she added, had the option to revise their complaint, which encompassed drivers who had paid for Tesla services and parts since March 2019 and merged five claims.
Requests for comment from the consumers’ attorneys were not immediately answered on Saturday.
The complaint states that drivers with traditional engine vehicles can use the original manufacturer’s or other firms’ parts for repairs at dealerships or independent shops. Customers claimed that Tesla is different since it only uses parts made by the Austin, Texas-based firm or its authorized service facilities, and it also requires them to have their cars serviced by them.
Rather than utilizing a chain of franchisees to sell its cars, Tesla sells its cars directly to customers. From January to September, it recorded $6.15 billion in revenue from services and other automotive products, or 9% of its total revenue of $71.6 billion. Eighteen percent of the total revenue, or $57.9 billion, came from vehicle sales.
Lambrix v. Tesla Inc., U.S. District Court, Northern District of California, Case No. 23-01145, is the matter.
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