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Tesla Defects and Recalls

Tesla, Inc., previously known as Tesla Motors, has risen to prominence in the automotive world in a relatively short period of time. Since its inception in 2003, Tesla’s journey toward pushing the boundaries of electric vehicle technology has not only been an inspiring tale of innovation and entrepreneurship but also one punctuated with a series of legal disputes involving customers and regulatory authorities. Learn more about Tesla below, including customer complaints and safety recalls. If you own or lease a Tesla in California that has been plagued with problems you can’t seem to get fixed, call Nita Lemon Law Firm in Los Angeles for a free consultation to discuss your options.

Facts About Tesla

Tesla, Inc. is a California-based American electric vehicle and clean energy company, co-founded by Martin Eberhard and Marc Tarpenning. Elon Musk, who joined the board of directors as chairman in 2004 and later became the CEO, has played a pivotal role in its growth and global recognition. By 2021, Tesla’s market capitalization reached a staggering $650 billion, making it the most valuable automobile manufacturer globally, far outstripping traditional automakers.

In terms of sales, Tesla reported revenue of $31.5 billion in 2020, a significant increase compared to $24.6 billion in 2019, according to data from the company’s annual financial report. This upward trajectory was fueled by an expanding lineup of electric vehicles, which includes the Model S luxury sedan, the Model 3 compact sedan, the Model X SUV, and the Model Y compact SUV. The Roadster sports car, the Cybertruck, and the Semi electric truck are other exciting future additions to this lineup.

Defects, Recalls, and Lemon Law Claims Against Tesla in California

Despite its groundbreaking success, Tesla has not been immune to recalls and legal issues. The company has faced multiple recalls, either voluntarily or as enforced by the National Highway Traffic Safety Administration (NHTSA). For instance, in February 2023, Tesla was forced to recall nearly 54,000 vehicles due to a “Full Self-Driving” (FSD) software issue that could potentially cause accidents by rolling through stop signs. This was one of the most significant recalls in Tesla’s history, involving its high-profile autonomous driving technology.

Tesla has also faced various lawsuits under the “Lemon Law” in California and other parts of the United States. The Lemon Law, designed to protect consumers from defective vehicles, requires a manufacturer to either replace the vehicle or refund the purchase if the vehicle is deemed a “lemon” after a reasonable number of unsuccessful repair attempts.

For instance, in 2020, a California resident filed a lawsuit against Tesla alleging that his Model X was a lemon due to numerous unresolved issues, including malfunctioning doors, poor paint quality, and battery problems. The plaintiff sought a buyback under California’s lemon laws.

Similarly, in another high-profile case in 2013, a Wisconsin physician sued Tesla under that state’s Lemon Law, claiming his Model S was plagued with multiple issues, including failure to start and malfunctioning door handles. Tesla refuted the claims, arguing the physician was trying to exploit the law, but the case brought significant attention to potential quality control issues at Tesla.

Beware of Tesla’s Arbitration Agreement

All Tesla purchase orders come with a pre-printed Agreement to Arbitrate included with the paperwork. Accepting this agreement means you are giving up your right to a jury trial and agree instead to arbitrate any dispute with Tesla through a process known as binding arbitration. Corporate defendants favor arbitration over jury trials because they are far more successful in arbitration and if they do lose in arbitration, the plaintiff’s awards are typically far less than what a jury would award.

Tesla’s arbitration agreement does include an important provision giving consumers 30 days from purchase to OPT OUT of binding arbitration by notifying Tesla that they want to preserve their right to a jury trial and want to be excluded from the binding arbitration clause. This requires affirmative action on your part in the form of sending a letter to Tesla at the address provided and including the required information as outlined in the arbitration agreement. Read your contract carefully to make sure you opt out correctly and on time.

We recommend that all consumers preserve their right to a jury trial and opt out of arbitration. Sadly, most buyers are not even aware their vehicle purchase contract contains an arbitration clause. In my experience, the first time consumers learn they are subject to arbitration is when they come to me for help with their lemon law case.

Help Is Available to Deal With Tesla Lemon Law Defects

While Tesla, Inc. is a pioneering force in the electric vehicle industry and a symbol of innovation, it has had its share of recalls and legal challenges under Lemon Laws. Here at Nita Lemon Law Firm, we believe in consumer rights and stand ready to assist anyone who believes they may have purchased a “lemon.” Our experienced California lemon law attorney understands the complexities of the Lemon Law and can guide you through the process, ensuring you receive the justice you deserve. For a free initial consultation, call Nita Lemon Law Firm at 213-232-5055 in Los Angeles, or statewide throughout California at 877-921-5256.

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