Tesla gets more time to defend against driver class action over insurance

SAN FRANCISCO: A judge in California said he would give Tesla more time to build its defences against a proposed class action accusing it of overcharging for insurance, after an outside lawyer for the electric vehicle maker pointed to delays in collecting information.

Oakland-based judge Michael Markman of Alameda Superior Court said at a hearing on Tuesday that he would hold a hearing in October 2025 on whether to certify the case as a class action, later than the plaintiff's lawyers had suggested.

A Tesla customer sued the company last year on behalf of drivers in 11 states, claiming it inflated insurance premiums based on "false" crash warnings instead of actual driving behaviour.

The lawsuit said Tesla, which sells insurance for its vehicles directly to customers, violated California’s sweeping unfair competition law, in addition to breaking contracts with drivers.

A lawyer for Tesla said at Tuesday's hearing that it was taking “a lot longer” than expected to gather information to defend against the case because of the number of states involved and the departure of a Tesla employee who had been working with its outside attorneys.

“Just last week we lost our main contact at the company,” said attorney Min Kang, representing Tesla.

Kang did not name the official or the person's role at Tesla, but she said the company was in the process of hiring a replacement. “So that is complicating things,” she said.

Austin, Texas-based Tesla, Kang and an attorney for the named plaintiff did not immediately respond to requests for comment.

Tesla, which has denied any wrongdoing, lost separate bids last year and in June to throw out some claims in the case.

Tesla offers insurance that relies on real-time driving behavior. The company says premiums are based on factors including a "safety score," which includes vehicle data related to hard-braking, "aggressive" turning and "forward collision warning alerts."

Many Tesla drivers have "reported suffering sporadic and random Forward Collision Warnings when there is no danger in sight," which affects their safety score and drives up their premiums, the complaint said.

A Reuters special report published last year and that was part of a Pulitzer-prize winning series detailed how complaints about Tesla’s insurance unit had drawn scrutiny from state regulators and plaintiffs' lawyers.

The lawsuit in Alameda was filed on behalf of Tesla drivers who bought the company’s insurance in Arizona, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah and Virginia.