A pair of proposed antitrust class actions has been filed against Tesla, alleging that the company has reduced competition for maintenance and replacement parts for its electric vehicles. This has resulted in owners paying more and waiting longer for repair services.
The lawsuits claim that Tesla designed its electric vehicles, warranties, and repair policies to discourage owners and lessees from using independent repair shops outside of Tesla’s control.
This has led to exorbitant wait times for drivers who would have otherwise opted for independent repair services.
Right to Repair Legislation
The lawsuits are part of a broader trend of right to repair legislation gaining momentum.
This legislation aims to prevent manufacturers from restricting access to repair information and parts, thereby promoting competition and reducing costs for consumers.
Also Read: Elon Musk Reacts Strongly As California EV Incentive Policy Excludes Tesla Popular Models
Impact on Franchise Dealerships
The outcome of these lawsuits may have implications for franchise dealerships. If Tesla is required to dismantle its repair services and parts monopoly, it could lead to increased competition and lower prices for consumers.
EVs and Higher Insurance Premiums
A separate issue affecting electric vehicle owners is the high cost of repairing or replacing damaged battery packs. Insurance companies often write off cars entirely, leading to higher insurance premiums and increasing the cost of ownership for EVs compared to internal combustion engine vehicles.
Battery Repairability
The battery within an EV can be extremely costly to replace, often representing up to 50% of the vehicle’s price tag.
Some manufacturers claim to be making battery packs easier to repair, but Tesla has taken a different approach with its Model Y, whose structural battery pack has been described as having “zero repairability.”
Insurance Costs
Unless manufacturers produce more easily repairable battery packs and provide third-party access to battery cell data, insurance premiums are likely to continue rising as EV sales grow.
According to Policygenius, the average U.S. EV insurance payment is $206 per month, 27% higher than for a comparable combustion-engine vehicle.
Companies to Watch
Each week, we highlight interesting companies in the automotive technology space. This week, we feature TotalCustomerConnect and Altelium.
TotalCustomerConnect
TotalCustomerConnect aims to increase automotive retailer profitability by improving dealerships’ customer experience.
They provide innovative customer-centric solutions for automotive dealerships, with measurable results in customer pay revenue and building quality customer relations.
Altelium
Altelium provides warranties, insurance, and consultancy to empower businesses working with batteries.
Their intelligent platform offers real-time and AI-enhanced insurance technology, one dashboard to manage data and policies, and complete visibility at your fingertips.
Also Read: EV Industry Faces Plummeting Demand Infrastructure Issues and Policy Criticism
Investment Opportunities
The evolving nature of automotive technology and the increasing prevalence of electric vehicles present numerous investment opportunities.
Companies like TotalCustomerConnect and Altelium exemplify innovation in addressing the industry’s challenges.
TotalCustomerConnect focuses on enhancing dealership profitability through customer experience improvements, while Altelium’s advanced insurance and warranty solutions cater to the growing demand for battery-related services.
As the EV market expands and regulatory pressures shape repair practices, businesses that promote accessibility, affordability, and sustainability are poised to drive growth, making them key players to watch in the automotive sector.