Tesla Faces US Department of Justice Probe Over Vehicle Range Claims

Tesla Faces US Department of Justice Probe Over Vehicle Range Claims

In Recent developments, Tesla Inc. has come under the scrutiny of the US Department of Justice, which has initiated requests for information and issued subpoenas related to potential violations concerning personal benefits and, particularly, the advertised range of Tesla vehicles. These actions have raised significant questions about the electric vehicle giant's practices and legal compliance.

Tesla's acknowledgment of these requests and subpoenas, which became public in a filing during the third quarter, highlights the increasing level of scrutiny the company faces from federal authorities. These inquiries have added to the growing number of government investigations that Tesla currently finds itself entangled in.

The central focus of this particular investigation centers around the claims related to the advertised range of Tesla vehicles. This issue has been a point of concern for consumers, especially those who have purchased Tesla electric vehicles with expectations based on the stated range figures. The US Department of Justice is delving into this matter to determine whether Tesla has adhered to the advertised range specifications and whether the figures provided accurately represent the capabilities of these vehicles.

Furthermore, this investigation is part of a broader inquiry into potential violations concerning personal benefits. This aspect of the investigation has been triggered by the generous perks provided to Tesla's Chief Executive Officer, Elon Musk, dating back to as early as 2017. These perks have included intriguing projects, such as a glass house for Musk. The inquiry's objective is to assess whether these benefits complied with regulatory and legal standards.

Additionally, earlier this year, Reuters reported on the existence of a specialized team within Tesla referred to as the "diversions team." This team was allegedly established to handle customer complaints regarding their vehicle ranges, potentially diverting these issues away from traditional channels. The practices of this team are now part of the ongoing investigations.

Tesla Faces US Department of Justice Probe Over Vehicle Range Claims

The implications of these inquiries are significant. Tesla's filing warned of "the possibility of a material adverse impact on our business" if the government proceeds with an enforcement action based on the outcomes of these investigations. While, to the best of its knowledge, Tesla maintains that it has not engaged in any wrongdoing, the potential consequences loom large.

These subpoenas further contribute to the increasing number of government investigations surrounding the electric vehicle manufacturer. Notably, the Department of Justice is simultaneously examining the claims made by Tesla regarding its self-driving technology. This multifaceted scrutiny highlights the elevated level of attention directed towards Tesla and its operations.

In a separate legal development, the US Equal Employment Opportunity Commission has taken legal action against Tesla. The commission alleges that the company has been "tolerating widespread and ongoing racial harassment of its Black employees" at its Fremont, California plant. This lawsuit underscores the legal challenges that Tesla is currently facing.

As Tesla navigates these investigations, it is clear that the company's practices and representations are under intense scrutiny. The outcomes of these inquiries will undoubtedly have far-reaching implications, not only for Tesla but also for the electric vehicle industry as a whole. The manner in which the company addresses these challenges and any potential changes that may result from the investigations remain to be seen.

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