Tesla Reaches $1.5M Settlement With Drivers Over Claims a Software Update Reduced Battery Power

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Tesla Software Update Class Action Settlement Overview:

• Who: Tesla has reached a $1.5 million settlement to pay 1,700 Model S and X owners and lessees 
• Why: The amount is to settle a class action lawsuit that was filed in response to an update that Tesla released to its vehicle’s software to reduce the risk of battery fires
• Where: The motion was originally filed in California federal court on behalf of all persons worldwide who purchased, owned, used, or leased one or more of Tesla’s Model S or X vehicles

Tesla has reached a $1.5 million settlement with drivers who allege that the company pushed out a software update that reduced the range of their vehicles by 20 to 40 mile, a motion filed in California federal court shows.

The Tesla software update settlement would end a class action lawsuit that was filed in response to the update that Tesla released to reduce the risk of battery fires, Law360 reports.

Class members — made up of 1,743 Tesla owners — would receive $625 each as part of the settlement, and some would get a prorated amount, lead Plaintiff David Rasmussen said in the motion for approval.

According to the 2019 class action lawsuit, Tesla released the software update to mitigate a fire risk that was being caused by the batteries, but the update cut the cars’ range by 20 to 40 miles. Rasmussen says that his own car dropped from a full charge range of 247 miles to 217 miles, and that he was denied a replacement battery under warranty.

He argued in the Tesla software update class action that the company had to face consequences for reducing its cars usability after it had sold them, adding that was unfair business practice and violated state and federal consumer protection laws.

According to Law360, a Tesla spokesperson said at the time that there was a “very small percentage” of older Model S and Model X vehicles that may have noticed a reduction in range after the software update.

With the recent Tesla software update settlement, Rasmussen said the class would have an excellent and efficient result. In the motion for approval, he said: “Plaintiff and his undersigned counsel believe the Settlement to be in the best interests of the settlement class members and seek to begin the court approval process that is required for all class action settlements.”

As part of the Tesla settlement, attorneys for the drivers would receive $410,000 in legal fees and expenses.

The settlement includes anyone in the U.S. who owned or leased a Tesla Model S vehicle between May 2019 and September 2020 that experienced a limitation of maximum battery voltage as a result of Tesla’s May 2019 software update, Law360 reports.

If the Tesla settlement is approved by the court, all class members will get a notice via mail.

Do you have an electric vehicle? Tell us how many miles your vehicle can run for on a full charge in the comments section!

Rasmussen is represented by Robert J. Nelson and Nimish R. Desai of Lieff Cabraser Heimann & Bernstein LLP.

Tesla is represented by Penelope A. Preovolos of Morrison & Foerster LLP and Sean P. Gates of Charis Lex PC.

The Tesla Software Update Class Action Lawsuit is Rasmussen v. Tesla Inc., Case No. 5:19-cv-04596, in the U.S. District Court for the Northern District of California.

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