Tesla's EV Range Is Far From Accurate (And That's on Purpose)

Beyond price, one of the biggest hurdles to mass EV adoption involves concerns over range and charging. And Tesla, according to a new Reuters investigation, has been exaggerating the ranges of its EVs to get more people on board. 

Faced with owners trying to bring their seemingly dysfunctional cars in for repair, the company created an entire team responsible for "diverting" those same customers. 

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Tesla's been exaggerating the distances its cars could travel for years; around 10 years ago, the company wrote and installed algorithms that show "rosy" range projections on the dashboard of its vehicles, according to a person familiar with the situation. When the battery fell to less than half of its full charge, the algorithm would show a more realistic range. 

“Elon wanted to show good range numbers when fully charged,” the person told Reuters. “When you buy a car off the lot seeing 350-mile, 400-mile range, it makes you feel good.”

Though it is unclear whether Tesla  (TSLA) - Get Free Report still employs a similar algorithm, regulators and independent testers alike have flagged its range exaggeration. The company was fined earlier in the year by South Korean regulators who found ranges to be as little as half what they were advertised.

The U.S. Environmental Protection Agency (EPA) -- which is responsible for verifying the ranges car companies advertise -- told Reuters it has required Tesla to cut its range estimates by an average of 3% since 2020. 

EV companies advertising better range than they're giving isn't unique to Tesla. A recent study of 21 EV brands found that the cars, on average, fell short of advertised ranges by around 12%. Gregory Pannone, a co-author of the study, told Reuters that three Tesla models had the worst performance, missing their advertised ranges by an average of 26%. 

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“I’m not suggesting they’re cheating,” Pannone said. “What they’re doing, at least minimally, is leveraging the current procedures more than the other manufacturers.”

What is unique to Tesla, though, is the "Diversion Team" the company created in Las Vegas, with the specific objective of canceling as many appointments over range concerns as possible. 

Tesla's quiet "Diversion Team" closed hundreds of cases every week, according to Reuters, with managers telling the Diverters that they were saving the company around $1,000 per canceled appointment. 

These cars did not need to be repaired, according to Reuters. There was nothing to fix -- the issue was Tesla hyping an unrealistic driving range and granting customers an unrealistic expectation of just how far they can expect to go. 

TheStreet has reached out to Tesla for comment.

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