The still-developing technology and supply chains for Electric Vehicles (EVs) have spawned a new age in Lemon Law and Consumer Protection actions.
In particular, EVs are subject to claims related to battery defects, vehicle range, software and availability of replacement parts.
Battery Defects and Degradation
Batteries in an electric vehicle are large, complex and very expensive. In order to entice apprehensive purchasers to try EV ownership, manufacturers have offered extended warranties on EV batteries, usually applicable up to 100,000 miles. However, over time, battery capacity inevitably becomes diminished making the extended battery warranties fodder for Lemon Law claims against EV manufacturers. To mitigate against a flood of warranty claims and litigation, OEM warranties will typically allow for degradation of up to 40% before the warranty will require a battery replacement.
To reduce “range anxiety,” manufacturers tout the distances their EVs can travel on a single charge. However, as any veteran owner of an EV can attest, range varies significantly depending on speed, ambient temperature and use of cabin climate controls. Consumer protection and truth-in-advertising laws can be used against OEMs with inflated promises of range, especially if such claims are not qualified with prominent notices that actual range varies significantly depending on conditions and use.
Electric vehicles are impressive pieces of technology, implementing software for telematics and distribution of the battery’s power, in addition to the wide array of electronics common in all modern vehicles. Due to the complexity and novelty of such software, local dealers may not have the expertise or experience to remedy significant software issues on a timely basis. With most Lemon Laws requiring a full refund if the vehicle is out of service for 30 days, software issues can easily lead to Lemon Law claims.
Availability of Replacement Parts
As Electric vehicles gain in popularity, some automakers have struggled to keep up with demand. Available parts are funneled to new production, leaving few components available for use as replacement parts. Of course, these issues have been greatly exacerbated by recent global supply chain issues. Failure to have replacement parts available could lead to liability under applicable Lemon Laws.
As the auto industry transitions to electric vehicles, Lemon Law attorneys are also adjusting their practices. Manufacturers of electric vehicles will need to carefully manage their warranty language, marketing materials, authorized service centers and supply chains to protect themselves against the next wave of Lemon Law litigation.
This article originally appeared in Crain’s Detroit Business on May 16, 2022.
About the author:
Max Sneyd focuses his practice on assisting clients with intellectual property protection, contract formation and negotiation, and entrepreneurial growth. With 20 years of experience, he leads the firm’s Intellectual Property practice group. He also assists clients on intellectual property litigation, licensing, business torts, entertainment law, supplier disputes.
Other posts to consider: