In March, Alexandre Ponsin embarked on a family road trip from Colorado to California in his recently purchased used 2021 Tesla Model 3. Expecting to achieve the advertised driving range of 353 miles on a fully charged battery, he was surprised to find that he often got less than half that range, especially in cold weather.

Convinced that his car had a serious defect, he contacted Tesla and scheduled a service appointment in California. However, he received two text messages. The first text said that “remote diagnostics” showed his battery was fine. The second text canceled his appointment.

Unbeknownst to Ponsin, Tesla had established a “diversion team” in Las Vegas to cancel as many range-related service appointments as possible.

Tesla created diversion teams because the company’s advertised range estimates were much higher than the true ranges that drivers were getting on the road. The range projections on Tesla EV dashboards were also far higher than reality. This discrepancy led to an enormous surge in service center appointments.

A new report from Reuters reveals that Tesla rewarded its employees for canceling appointments. Managers emphasized that each canceled appointment helped save Tesla approximately $1,000.

How Tesla Exaggerates EV Ranges

The reason for the underperformance of Tesla vehicles lies in the intentional inflation of in-dash range-meter projections by the company. About 10 years ago, Tesla designed algorithms for its range meter that would display exaggerated projections for the distance the car could travel on a full battery.

However, once the battery dropped below 50% charge, the algorithm displayed more realistic projections. Additionally, Tesla designed its vehicles with a “safety buffer,” providing about 15 miles of extra range after the dash readout showed an empty battery.

A source told Reuters that Tesla provided these dishonest range estimates at the personal instruction of CEO Elon Musk.

While other EV makers use the standard EPA formula to calculate range estimates, Tesla conducts additional range tests. Tesla’s approach has drawn criticism, as the EPA formula usually leads to more realistic range estimates.

In January, a government regulator in South Korea fined Tesla over $2 million for exaggerating its EV driving range. The regulator found that Tesla’s false advertising dates all the way back to August 2019.

With evidence mounting that Elon Musk has lied about the driving ranges of Teslas, it’s a good time to remember that honesty is always the best policy in business.