On some level, everyone who has been following the auto industry knew there was something like this going on. Pretty much every time an independent outfit like Edmunds tested EVs, Tesla not only under-performed but did so by a far worse margin than anyone else. The details, however, tell a story far more wide spread and egregious than all but the most jaded Elon watcher was expecting.
From Tesla created secret team to suppress thousands of driving range complaints
by Steve Stecklow and Norihiko Shirouzu
Tesla years ago began exaggerating its vehicles’ potential driving distance – by rigging their range-estimating software. The company decided about a decade ago, for marketing purposes, to write algorithms for its range meter that would show drivers “rosy” projections for the distance it could travel on a full battery, according to a person familiar with an early design of the software for its in-dash readouts.
Then, when the battery fell below 50% of its maximum charge, the algorithm would show drivers more realistic projections for their remaining driving range, this person said. To prevent drivers from getting stranded as their predicted range started declining more quickly, Teslas were designed with a “safety buffer,” allowing about 15 miles (24 km) of additional range even after the dash readout showed an empty battery, the source said.
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Tesla was fined earlier this year by South Korean regulators who found the cars delivered as little as half their advertised range in cold weather. Another recent study found that three Tesla models averaged 26% below their advertised ranges.
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Such advisors handled a variety of issues, including range complaints. But last summer, Tesla created the Las Vegas “Diversion Team” to handle only range cases, according to the people familiar with the matter.
The office atmosphere at times resembled that of a telemarketing boiler room. A supervisor had purchased the metallophone – a xylophone with metal keys – that employees struck to celebrate appointment cancellations, according to the people familiar with the office’s operations.
Advisers would normally run remote diagnostics on customers’ cars and try to call them, the people said. They were trained to tell customers that the EPA-approved range estimates were just a prediction, not an actual measurement, and that batteries degrade over time, which can reduce range. Advisors would offer tips on extending range by changing driving habits.
If the remote diagnostics found anything else wrong with the vehicle that was not related to driving range, advisors were instructed not to tell the customer, one of the sources said. Managers told them to close the cases.
Tesla also updated its phone app so that any customer who complained about range could no longer book service appointments, one of the sources said. Instead, they could request that someone from Tesla contact them. It often took several days before owners were contacted because of the large backlog of range complaints, the source said.
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The team was expected to close about 750 cases a week. To accomplish that, office supervisors told advisers to call a customer once and, if there was no answer, to close the case as unresponsive, the source said. When customers did respond, advisers were told to try to complete the call in no more than five minutes.
In late 2022, managers aiming to quickly close cases told advisors to stop running remote diagnostic tests on the vehicles of owners who had reported range problems, according to one of the people familiar with the diversion team’s operations.
“Thousands of customers were told there is nothing wrong with their car” by advisors who had never run diagnostics, the person said.
Normally, this kind of news would devastate a high flying stock like Tesla (P/E ratio 75.64, more than ten times that of VW, GM, or BMW), particularly in a week that also saw evidence that yet another company had passed Tesla in the robotaxi race, but there was nothing more than a quick drop which was gone by the afternoon.
Yet another reminder, the market can stay irrational...
