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Elon Musk and Tesla are being sued in a new class action lawsuit over alleged odometer fraud on their Model Y vehicles. The suit claims Model Y odometers were off by as much as 117 percent just before the 50,000-mile warranty expired — potentially causing owners to lose warranty coverage earlier than they should have.
This legal challenge emerges less than a year after another class action case accused Tesla of falsifying vehicle driving range information. Musk previously paid millions in fines to South Korean authorities and acknowledged that Tesla had inflated range figures on its vehicles.
The legal troubles don’t stop there.
Tesla shareholder Michael Perry filed a separate lawsuit alleging massive insider trading, claiming Musk “exploited his position at Tesla” and “breached his fiduciary duties” by selling over $7.5 billion worth of Tesla stock in late 2022 while possessing “adverse, material non-public information.”
According to Road and Track, the current odometer case alleges that “Tesla Inc. knowingly overstates the distances traveled in Tesla Vehicles, or at minimum tolerates substantial inaccuracy in distances traveled in Tesla Inc.’s favor.”
The alleged fraud centers around Tesla’s use of a predictive model for its odometer system — one that doesn’t necessarily reflect actual driving patterns. Lead plaintiff Nyree Hinton purchased a pre-owned Model Y with approximately 36,772 miles and noticed something strange. During his first six months of ownership, the vehicle recorded an average of 2,217 miles each month, quickly pushing the car beyond the 50,000-mile warranty threshold.
What happened next raised serious questions.
Suspicious Mileage Patterns
Over the following year, Hinton’s Model Y suddenly began recording significantly less mileage — averaging just 1,415 miles monthly — despite his commute actually increasing during this period. That’s about 800 fewer miles per month than previously recorded.
Hinton claims the car “consistently exhibited accelerated mileage accumulations of varying percentages ranging from 15% to 117% higher than plaintiff’s other vehicles and his driving history.”
The lawsuit suggests Tesla’s predictive odometer model fails to properly adjust to changes in driving behaviors, resulting in inaccurate readings that conveniently push vehicles out of warranty coverage faster than they should.
Tesla ties its vehicle warranties directly to mileage milestones rather than just calendar dates — making accurate odometer readings crucial for consumers. The 50,000-mile basic warranty is a key coverage threshold that owners rely on for repairs.
Whereas many traditional automakers use mechanical odometers directly tied to wheel rotations, Tesla’s software-based approach apparently leaves room for significant discrepancies.
Musk and Tesla paying damages from lawsuits has become almost routine at this point. The world’s richest man likely wouldn’t even notice if they lost or settled yet another case. But as these legal challenges continue to stack up, one wonders when — or if — consumers might finally decide they’ve had enough.
