Tesla and CEO Elon Musk are under fire again; this time from their own shareholders. A proposed class-action lawsuit filed in Texas federal court accuses the company and its top executives of securities fraud tied to the troubled rollout of Tesla’s Robotaxi service.

Investors Take Legal Action Against Tesla Over Autonomous Driving Claims

The suit claims Tesla knowingly misled investors about the safety and readiness of its self-driving vehicles. It cites a widely publicized June test in Austin, Texas, where Robotaxis were seen swerving into the wrong lane, speeding, braking erratically, and dropping off passengers in unsafe locations. The U.S. National Highway Traffic Safety Administration (NHTSA) has opened an investigation into the incidents.

Following the test, Tesla’s stock dropped over 6%, erasing roughly $68 billion in market value.

Plaintiffs argue that Musk and Tesla overstated the reliability of the technology and failed to disclose material risks. Notably, Musk had assured investors the company was "laser-focused" on a June launch, calling the system scalable and safe, claims now under scrutiny.

The lawsuit also references a $243 million jury verdict against Tesla, where it was found partly liable for a crash involving its Autopilot in 2019. Highlighted in this article (Tesla Fou…. at People.com)

Robotaxis are a key pillar of Tesla’s future strategy, especially as EV sales flatten and Musk faces political backlash. However, regulatory hurdles and safety concerns could delay or derail expansion plans, especially in markets like California where Tesla lacks a permit for paid autonomous rides.

Alongside Musk, Tesla CFO Vaibhav Taneja and former CFO Zachary Kirkhorn are named as co-defendants. Tesla has not commented publicly on the suit.

Key Takeaways:

• Tesla and Musk accused of hiding safety risks in self-driving Robotaxi program
• $68B in market value wiped out over two days
• NHTSA is investigating the test program
• Comes just days after Tesla was found partially liable in a fatal crash

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