About a decade ago, Tesla allegedly employed a strategy to manipulate dashboard readouts in its electric cars, presenting optimistic and inflated projections of the distance owners could travel before needing to recharge, according to a source disclosed to Reuters. As a result, the automaker faced a surge of complaints last year regarding driving range, prompting the creation of a specialized team known as the “Diversion Team” in Las Vegas. This team’s alleged purpose was to cancel as many service appointments related to range as possible, effectively thwarting customers from bringing in their electric vehicles for service due to poor driving range.
The flood of appointments at Tesla’s service centers drove the company to take such measures, as stated in a Reuters report citing multiple sources familiar with the matter. Today, join us as we delve into Tesla’s “secret team.”
Many Tesla owners had higher expectations regarding their vehicle’s driving range, influenced by the company’s advertised estimates and the projections shown on the in-dash range meters. As a result, numerous customers sought assistance with their vehicles, but a significant number were reportedly informed by advisors, who had not conducted any diagnostics, that there was nothing wrong with their cars, according to one of the sources.
The report further claims that Tesla managers provided instructions to employees from the secretive Nevada team, informing them that each canceled appointment saved the company approximately $1,000. Additionally, they were told that their actions were relieving the pressure on service centers, which were experiencing long wait times for appointments. This alleged approach by the “Diversion Team” to canceling service appointments was intended to address the overwhelming demand for service appointments related to driving range complaints.
In March, Alexandre Ponsin, a 2021 Tesla Model 3 owner, took a family road trip from Colorado to California in his newly purchased used Tesla, when he noticed he was getting significantly less range than the advertised range of 353 miles on a fully charged battery. However, he noticed severe underperformance, particularly in cold weather. He stopped about a dozen times to charge the car’s battery on the way. Concerned about the severe underperformance, he contacted Tesla and scheduled a service appointment in California.
To his surprise, Ponsin later received two text messages from Tesla. The first message claimed that “remote diagnostics” had determined his battery was in good condition, and the second one stated, “We would like to cancel your visit.”
Unbeknownst to Ponsin, Tesla had directed its employees to prevent customers who complained about poor driving range from bringing their vehicles in for service. The company discreetly formed a “Diversion Team” in Las Vegas the previous summer with the specific objective of canceling as many range-related service appointments as possible.
However, Ponsin remained persistent and brought his car to the service center without an appointment. A technician briefly looked at the car and assured him that it was fine, leaving Ponsin to conclude that the issue was not with the car but with Tesla overstating its performance and range estimates.
According to those familiar with the matter, in most cases, the customers who complained about their vehicles likely did not require any repairs. Instead, Tesla created a wave of complaints by exaggerating the range of its futuristic electric vehicles, setting consumer expectations beyond what the cars could deliver. This was supported by interviews with three automotive experts who had tested or studied Tesla’s vehicles and found that Teslas often failed to achieve their advertised range estimates and the projections provided by the cars’ own equipment. Tesla and its CEO, Elon Musk, did not provide any responses to the detailed questions posed by Reuters for this particular story.
Years ago, Tesla made the decision to exaggerate the potential driving distance of its vehicles by manipulating their range-estimating software. Approximately a decade ago, the company developed algorithms for the range meter with the intention of displaying optimistic projections to drivers about the distance they could travel on a fully charged battery. A person familiar with the early design of the in-dash readout software disclosed this information.
According to this person, when the battery level dropped below 50% of its maximum charge, the algorithm adjusted to show drivers more realistic projections for their remaining driving range. Additionally, Tesla incorporated a “safety buffer” in its vehicles to prevent drivers from getting stranded as their predicted range declined rapidly. This safety buffer allowed for approximately 15 miles of additional range even after the dashboard readout indicated an empty battery.
Reuters reported that Tesla was fined by South Korean regulators for delivering as little as half the advertised range in cold weather. Studies showed Tesla’s range meters often overstated the distance the cars could travel. The U.S. EPA required Tesla to reduce range estimates for some vehicles, but variations exist between automakers’ and agency tests.
Although Tesla’s range meters overstate the actual distance the car can travel, the company’s navigation system provides a more realistic estimate, considering external factors such as temperature. Data from Recurrent, an EV analytics company, revealed Tesla’s range meters didn’t adjust for outside temperatures, though the navigation system provided a more comprehensive estimate. However, both still tended to overstate the actual driving range.
Unlike other automakers, Tesla has consistently designed its range meters to deliver aggressive rather than conservative estimates. Studies by Recurrent have revealed that Tesla’s in-dash range meters tend to provide optimistic estimates compared to competitors like the Ford Mustang Mach-E, Chevrolet Bolt, and Hyundai Kona.
The accuracy of Tesla’s range estimates and its aggressive approach have raised concerns among consumers and regulators about potential range anxiety, hindering the wider adoption of electric vehicles.
Tesla is not the only automaker with cars that do not consistently achieve their advertised ranges. A study of 21 different brands of EVs, published by SAE International, found that on average, EVs fell short of their advertised ranges by 12.5% during highway driving. While the study did not mention the tested brands, three Tesla models exhibited the worst performance, falling short of their advertised ranges by an average of 26%.
Tesla tends to push the limits of government testing regulations with the range of claims displayed on window stickers. Unlike many other automakers, Tesla conducts additional range tests on all its models, resulting in more aggressive range estimates that sometimes overstate the actual driving range. The Environmental Protection Agency (EPA) must approve the range numbers displayed on window stickers, and the agency conducts its own tests on a portion of new EVs each year as part of an audit program. Tesla has been required to reduce its estimated ranges by an average of 3% following EPA audits.
The EPA emphasizes that individual experiences with vehicle efficiency might differ from the agency-approved estimates. Independent automotive testers often find discrepancies between EPA-approved fuel efficiency or driving range claims and their own test results, especially in the case of Tesla vehicles.
The Korea Fair Trade Commission (KFTC) found that Tesla had not informed customers about the significant reduction in range during cold weather. Tesla has faced scrutiny and was fined about $2.1 million for misleading customers about the impact of cold weather on its cars’ range. The KFTC also required Tesla to publicly admit the misleading information, and Elon Musk and two local executives did so in a statement acknowledging “false or exaggerated advertising.”
Last year, Tesla’s electric vehicle sales saw a significant surge, delivering approximately 1.3 million EVs in 2022, a considerable increase compared to five years earlier, when they delivered around 100,000 vehicles.
With the growing sales, the demand for service appointments also increased, leading to waiting times of up to a month for available bookings. Tesla instructs owners to book appointments through a phone app, and the company found that many issues could be addressed remotely by their “virtual” service teams, who could diagnose and fix various problems without the need for in-person service.
Tesla’s “Virtual Service Advisors” were instructed to divert customers who did not require in-person service, including those with range complaints. Last summer, Tesla established the “Diversion Team” in Las Vegas, solely dedicated to handling range-related cases. The office atmosphere resembled that of a telemarketing boiler room, with employees celebrating appointment cancellations using a metallophone.
The advisers would run remote diagnostics on customers’ cars and try to contact them. They were trained to inform customers that the EPA-approved range estimates were predictions, not exact measurements, and that battery degradation over time could reduce range. They offered tips on how to extend the range by modifying driving habits. If the diagnostics found other issues unrelated to the range, advisers were told not to inform the customers and close the cases.
To handle the high volume of range complaints, Tesla updated its phone app, routing all U.S. range complaints to the Nevada diversion team. The team received up to 2,000 cases a week and aimed to close about 750 cases a week. To achieve this, advisers were instructed to call customers once and close the case as unresponsive if there was no answer. In late 2022, the managers directed advisers to stop running remote diagnostics for owners reporting range issues, and thousands of customers were informed that their cars had no problems without the diagnostics being conducted.
Recently, Tesla stopped using the Nevada diversion team to handle range-related complaints, and virtual service advisors in a Utah office now handle such cases, although the reason for the change remains unknown.