📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

Tesla suppressed thousands of range complaints using secret 'diversion team'

Published 07/27/2023, 11:21 AM
© Reuters Tesla (TSLA) suppressed thousands of range complaints using secret 'diversion team'

Reuters released a special report Thursday detailing an investigation into claims that Tesla (NASDAQ:TSLA) manipulated the dashboard displays in its electric vehicles to artificially enhance driving range projections. The report further explains the existence of a "Diversion Team" within the company to cancel range-related service appointments, leading to customer dissatisfaction and range anxiety.

According to the investigation, Tesla began exaggerating its vehicles’ potential driving distance about a decade ago. However, when the battery fell below 50%, the algorithm would show drivers a more realistic projection of their remaining range. According to an unnamed source familiar with the matter, the predicted range would begin to decline more quickly.

“We’re looking at the range, and you literally see the number decrease in front of your eyes,” said Tesla driver, Alexandre Ponsin.

According to the report, when Ponsin noticed the discrepancy in range estimates, he contacted Tesla and booked a service appointment. He later received two text messages, telling him that “remote diagnostics” had determined his battery was fine, and then: “We would like to cancel your visit.”

The company had quietly created a “Diversion Team” and instructed them to cancel as many range-related appointments as possible.

As per the sources cited by Reuters, managers told their employees that each service appointment cancellation was saving Tesla roughly $1,000. The act of canceling these appointments turned into a celebration for some employees, who would mute their phones and hit a metal xylophone, triggering applause from coworkers who sometimes stood on desks.

It could not be determined if the EV manufacturer continues to use algorithms to boost in-dash range estimates. However, automotive testers and regulators continue to flag the company for exaggerating the distance its vehicles. Earlier this year, South Korean regulators fined Tesla after it was discovered that their cars provided only around half of their promised range under cold weather conditions. Additionally, a recent study showed that the average range of three Tesla models was 26% lower than what was advertised.

According to the unnamed source, the directive to present exaggerated range estimates came from CEO, Elon Musk.

“Elon wanted to show good range numbers when fully charged,” the person said, adding: “When you buy a car off the lot seeing 350-mile, 400-mile range, it makes you feel good.”

Shares of TSLA are up 0.16% in mid-day trading on Thursday.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.