Of course, the company is denying it. Vehemently.
While Tesla continues to burn through cash at previously-unknown speeds as it tries to pull itself through production “hell,” allegations have surfaced against the American EV firm regarding some of its (alleged) practices involving its sold-on demonstrator and loaner cars. A former employee is claiming that the company sold “lemons,” cars with significant manufacturing/pre-delivery defects demanding thousands of dollars of repairs to rectify, to consumers and labelling them as “used” or “demo/loaner” vehicles without disclosing the true condition of the vehicle.
Adam Williams had been employed at Tesla since late-2011, and at the peak of his career, served as a regional manager for the zero-emissions luxury car brand. He reported in late 2016 and/or early 2017 about Tesla selling cars with “high-dollar, pre-delivery damage repairs” to customers as previously-used vehicles, a practice that he believed (rightly) was illegal. Upon his first instance of reporting the practice, Williams was demoted from regional manager to service manager, serving at a Tesla location in New Jersey.
This didn’t stop Williams from bringing the matter up again, at which point he was demoted once again later in 2017 to the position of “mobile manager” (whatever the hell that is), before being ultimately fired that year. The civil action suit that Williams is pushing against Tesla claims that there is a connection between his reporting of illegal and unethical activity and his demotions (and subsequent dismissal, which is a fair assumption), and is suing for damages and compensation.
In a statement to The Verge, Tesla has hit back at these allegations, saying:
“There is no merit to this lawsuit. Mr. Williams’ description of how Tesla sells used or loaner vehicles is totally false, and not how we do things at Tesla. It’s also at odds with the fact that we rank highest in customer satisfaction of any car brand, with more owners saying they’d buy a Tesla again than any other manufacturer. Mr. Williams was terminated at Tesla for performance reasons, not for any other.” — Representative, Tesla Inc.
Tesla has previously settled a lawsuit with a Model X owner some two years ago when said owner claimed that because the company had rushed the car into production with several software flaws, it caused the vehicle to behave erratically, posing significant risk to himself and others. Tesla bought the car back along with the settlement (and the complainant now, it's claimed, owns a Tesla Model S and a first-generation Roadster).
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