Tesla Will Face Claims That It Monopolizes Repairs In Court

Photo: Richard Bord/WireImage (Getty Images)
Photo: Richard Bord/WireImage (Getty Images)

Good morning! It’s Wednesday, June 19, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

1st Gear: Tesla Accused Of Monopolizing Repairs

After pausing to give Fisker its moment in the limelight yesterday with news of its collapse, Tesla is back in the spotlight. Now, the electric vehicle maker is staring down the barrel of yet another legal fight, but at least this one doesn’t relate to company boss Elon Musk’s massive pay package.

Instead, Tesla will face a legal challenge from a group of disgruntled owners who claim that the EV maker monopolizes its repairs process and access to spare parts, reports Reuters. A judge in San Francisco ruled that Tesla owners could try to prove that Tesla coerced them into paying higher prices for repairs of their beloved EVs:


Owners said Tesla’s alleged coercion violated the federal Sherman antitrust law and California antitrust law.

[U.S. District Judge Trina] Thompson found evidence of a repairs monopoly in Tesla’s alleged refusal to open enough authorized service centers, and its designing vehicles to require diagnostic and software updates that only the company could provide.

Evidence of a parts monopoly included restricting original equipment manufacturers from selling “to anyone other than Tesla,” and Tesla’s selling parts to consumers only on a limited basis, the judge said.

The judge also found evidence that Tesla “coerced” some customers into making “undesired purchases” as a result of its repairs practices. Tesla, however, has so far not commented on the case.

The case in San Francisco is the latest legal battle to hit the American automaker and follows a trio of litigation brought to the EV maker last week. Those cases include two accusing company boss Musk of insider trading and a third that alleges he is working on artificial intelligence projects that could aid rival companies.

2nd Gear: China Could Expand Retaliatory EV Tariffs

To try and slow the onslaught of China’s electric vehicle rollout around the world, superpowers like the U.S. and the European Union have slapped massive tariffs on EVs being imported. In the U.S., the Biden administration placed a 100 percent levy on Chinese cars imported in the country, while Europe’s tariff is closer to 50 percent on some Chinese EVs.

Now, China is preparing to ramp up its retaliation to the measures, reports Forbes. The nation already outlined tariffs that could impact certain foreign automakers selling gas-powered cars in China, but now it could have its eyes set on other targets:

German automakers like BMW, Mercedes, Volkswagen and Porsche were seen as likely victims of Chinese retaliation because their huge imports of high-priced upmarket vehicles were sitting ducks. Stock prices dived.

Since then, the scope of any possible retaliation has expanded to include other industries with much more serious implications for EU trade.

“The European Union is getting more than it bargained for. Following the bloc’s move last week to slap tariffs on imports of electric vehicles made in China, Beijing has opened an anti-dumping investigation into imported pork and its byproducts. It’s a smart move by Beijing,” BreakingViews columnist Hudson Lockett said.

As tensions rise between China, Europe and the U.S., Jeep and Fiat owner Stellantis has come out against tariffs on vehicle imports. Carlos Tavares, CEO of the company, previously called tariffs on Chinese EVs a “trap” and warned that they risk making everyone worse off.

In response, his company announced this week that it would shift production of Chinese automaker Leapmotor’s products to Poland to skirt EU tariffs on Chinese EVs.

3rd Gear: Ferrari’s First EV Is Coming

Electric vehicles, whether Chinese or otherwise, seem to be here to stay. It’s for that reason that everyone from Ford to Porsche is plowing millions into the development of new electric vehicles to keep their existing buyers hooked and try and draw in new customers. But while luxury rivals Aston Martin may have pushed back its electric ambitions, Ferrari is sticking to the game plan and teased new details about its upcoming EV.

What are those important details, I hear you ask? Well the Italian automaker is now preparing to open a new plant that will assemble the electric model, which Reuters reports will cost around $500,000. As per the site:

The Italian brand, famed for its roaring petrol engines, has said it will launch an electric car late next year, and the planned price shows its confidence that ultra-wealthy drivers are ready for it, even as mass-market rivals are slashing electrical vehicle (EV) prices amid faltering demand.

The price tag, which doesn’t include features and personal touches that typically add 15-20%, is well above the average sale price of around 350,000 euros, including extras, for a Ferrari in the first quarter of this year, and many rival luxury EVs.

As well as the $500,000 electric car that will break cover next year, Ferrari’s new facility will also be home to production of future gas-powered models and hybrid cars from the Italian marque. The facility will enable the company to increase its output from 14,000 cars annually up to around 20,000 cars per year, reports Reuters.

Presumably, increased capacity for the automaker is essential to capitalize on the eye-watering demand it’s seeing for its Purosangue SUV, which is currently sold out until at least 2026.

4th Gear: Ford To Expand Layoffs

After securing a new contract for its American workers last year following weeks of strike action from the United Auto Workers union, the layoffs might be about to hit Ford. However, the cuts could come outside our borders as the automaker looks to trim its staff overseas.

The Mustang maker is reportedly undergoing some pretty serious restructuring efforts that could see it cut staff in Europe, reports the Detroit Free Press. The job cuts are expected to hit Ford offices in Germany, Spain and the UK. As the Free Press reports:

It is unclear how many additional job cuts are foreseen in Germany under the new restructuring plan, which comes on top of a previous restructuring program, said Benjamin Gruschka, who is head of the works council at Ford’s Cologne plant.

Gruschka added that a decision is expected by the end of June.

Ford has half completed its previous restructuring that called for 2,300 job cuts in Germany, reducing the staff number in the country to 13,000, according to Gruschka.

The cuts in Germany follow similar trimming efforts that were announced for Ford’s plants in Spain. Across the country, the Blue Oval is working to reduce its headcount by 1,600 workers. This follows an earlier pledge to cut staffing numbers by as much as 3,800 people across Europe.

Ford is blaming most of the cuts on its pivot to electric vehicles across Europe, which it says require fewer people to assemble.

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