Fact Sheet: Legal Obstacles:Electric Vehicles, E-bikes and E-scooters

LEGAL OBSTACLES: 
ELECTRIC VEHICLES, E-BIKES AND E-SCOOTERS

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State tort restrictions can impede victims’ abilities to bring negligence, wrongful death and product liability actions against electric vehicle manufacturers. In addition, there may be other obstacles for drivers, passengers or riders of various types of electric vehicles.*

LEMON LAWS AND DEFECTS

Lemon laws allow purchasers of new EV cars with serious defects to have the manufacturer fix the defect or provide a refund or replacement. However, many states force consumer complaints to first go through the manufacturer’s alternative dispute resolution mechanism, which can be biased against the consumer.

WARRANTIES AND DEFECTS

·      According to both Congress and the Federal Trade Commission, under the Magnuson-Moss Warranty Act (MMWA) consumers should be allowed to bring warranty lawsuits in court if a car manufacturer fails to uphold their warranty obligations and informal dispute resolution does not resolve the problem. Yet many consumer product manufacturers ignore this policy by placing forced arbitration clauses in written warranties and courts generally allow it.

·      If a car purchaser signs a sales contract with the dealer only and does not contract directly with the manufacturer, courts generally reject the automakers’ attempts to compel arbitration or ban class actions. That said, some car manufacturers are currently trying to force warranty claims into arbitration.

DIRECT-TO-CONSUMER CAR SALES

·      When automakers avoid dealers and sell cars directly to consumers, manufacturers can bind purchasers to forced arbitration and ban class action with direct-to-consumer contracts.

·      This method is how the largest EV company in the U.S., Tesla, prefers selling its cars (although direct-to-consumer sales are not always allowed by state law).

·      Currently, forced arbitration clauses in direct-to-consumer EV purchase and warranty documents appear to be specific to order, sale and purchase claims (i.e., not personal injury claims).

·      Though direct-to-consumer agreements may include an arbitration opt-out option, the directions, like the clauses themselves, tend to be buried in the fine print and are incomprehensible to most Americans.

E-TRUCKS AND E-BUSES

·      There are numerous tort restrictions already on the books that specifically target the legal rights of catastrophically-injured truck crash victims.

·      In addition to tort restrictions, low federally-mandated insurance minimums for commercial trucks can hobble a victim’s ability to recover. The same is true regarding some state insurance minimums for buses.

E-BIKES AND E-SCOOTERS

·      E-bike and e-scooter “terms of use” agreements contain liability waivers that bar personal injury lawsuits. The liability scheme for companies that rent such vehicles is to accept none of the responsibility for rider injuries, even if a company’s gross negligence is to blame, and makes riders agree to assume all the risk.

·      These companies also require that all disputes be resolved in private, secret forced arbitration systems, and they prevent riders from joining with others in class actions.

* Citations and support for each fact as well as more information can be found in the Center for Justice & Democracy study, Highway to the Danger Zone; The Enduring Risks of Electric Vehicles (May 2025).