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Tesla CEO Elon Musk is in the news after being sued several times over the past week. As the third wealthiest person on earth, Musk makes headlines all day every day and it is to become complacent to everything surrounding him but these latest lawsuits lobby some serious allegations at the Tesla CEO.
In one class action suit filed by Ryan Watstein of Watstein Terepka and Kenneth Quat of Quat Law Offices, it is alleged that Elon Musk “overstated the driving ranges of Tesla cars by an average of 26%, manipulated dashboard range meters to display false information, and diverted consumer complaints to avoid accountability.”
Elon Musk himself has already been fined millions by the South Korean government and admitted to inflating the ranges of Tesla vehicles, as noted in the class action lawsuit filed by Watstein-Quat. Tesla quietly reduced the range estimates (in rain) of the Model Y, S, and X by 6% back in January following a federal probe, according to Jalopnik.
All 67 pages / a full PDF of that lawsuit can be read here on Universal Hub. There are some particularly damning entries in the lawsuit filing. One in particular alleges that after Tesla owners realized they were misled by range estimates, instead of solving the problem, Musk had a ‘Diversion Team’ alter data inside of vehicles to falsely appear as if nothing was wrong:
Among other things, the range meter purports to inform drivers approximately how far their vehicles can travel on the remaining battery charge. Once customers realized that their cars weren’t performing as Musk claimed, Tesla was inundated with service requests complaining about the cars’ mileage. But Musk knew that servicing the cars would be pointless because the vehicles were working as designed – to provide lower driving ranges than advertised. So to avoid having to waste resources and having the lies exposed, Musk implemented a “Diversion Team.”
The Diversion Team was designed to perpetuate Musk’s fraud by preventing customers from having their vehicles serviced for range-related issues. For example, when a customer scheduled a service appointment to address the vehicle’s driving range, a member of the Diversion Team would conduct a “remote diagnostic” and, regardless of the results, tell the customer that the vehicle was fine and cancel the appointment. The Diversion Team further told customers that the stated range was a “prediction” rather than an actual measurement and falsely suggested that the range issues were the result of the batteries naturally degrading over time. The Diversion Team did not tell the truth: the ranges that Tesla’s vehicles could travel were exaggerated (at Musk’s direction), and the range meter deliberately misstated driving ranges (also at Musk’s direction). Indeed, the whole point of the “Diversion Team” was to divert attention from Musk’s deception. Chris Watkins: Chris is a college soccer coach who purchased a Tesla in 2020 in the state of Washington and now resides in Massachusetts.
When Musk/Tesla quietly made the adjustment to ranges back in January, all of the Model Y, S, and X owners simply woke up one day and had less range on their vehicles than the day before without any explanation offered. And as stated in the ‘Diversion Team’ entry above, things only seemed to get worse from there.
Second Lawsuit Alleges Elon ‘Massive Insider Trading’ At Tesla
In another lawsuit, a Tesla investor sued Elon Musk and accused “him of selling $7.5 billion worth of Tesla shares in late 2022 while knowing that the EV maker wouldn’t be able to meet expectations by the end of the year” according to a report going viral from Futurism.
The lawsuit filed by Tesla shareholder Michael Perry reads “By disposing of $7,530,113,926 worth of Tesla stock in November and December 2022 while he was in possession of adverse, material non-public information, E. Musk exploited his position at Tesla, and he breached his fiduciary duties to Tesla.”
As part of the lawsuit, Michael Perry is seeking for (an estimated) $3 billion to be returned to Tesla investors in addition to seeking damages from Musk and the company’s directors.
This lawsuit hinges on whether or not the timing of Elon Musk selling $7.5+ billion worth of stock constitutes insider trading, as Musk would have been privileged to information that would later be released which consequently caused Tesla shares to dip to a two-year low.
Amidst all of this, Elon Musk is still battling to get his $56 billion pay package back after judge Kathaleen McCormick voided back in February.