Elon Musk and Tesla were sued by shareholders who accused them of securities fraud for concealing the signifi
cant risk that the company’s self-driving vehicles, including the Robotaxi, were dangerous.
The proposed class action was filed on Monday night, following Tesla’
s first public test of its robotaxis in late June in the company’s Austin, Texas hometown.
That test showed the vehicles speeding, braking suddenly, driving ov
er a curb, entering the wrong lane, and dropping off passengers in the middle of multilane roads.
Tesla’s share price fell 6.1% over two trading days after the test began, wiping out about $68 billion of market value.
Musk and his electric vehicle maker were accused of repe
atedly overstating the effectiveness of and prospects for their autonomous driving technology, inflating Tesla’s financial prospects and stock price.
Related: Tesla Must Pay $243 Million Over Fatal Autopilot Crash
Shareholders said this included Musk’s assurance on an April 22 conference call that Tesla was “laser-focused on br
inging robotaxi to Austin in June,” and Tesla’s claim the same day that its approach to autonomous driving would deliver “scalable and safe deployment acros
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s diverse geographies and use cases.”
Tesla did not immediately respond on Tuesday to requests for comm
ent. Chief Financial Officer Viabhav Taneja and his predecessor Zachary Kirkhorn are also defendants.
Expanding robotaxis is crucial for Tesla as the company faces falling demand for its aging electric vehicles and a backlash over Musk’s politics.
Related: Tesla Plans Robotaxi Expansion to California and Arizona
Musk, the world’s richest person, wants to offer the service to half the U.S. population by year end, but must convince regulators and assure the public his technology is safe.
Monday’s lawsuit in Austin federal court is led by Tesla shareholder
Denise Morand, and seeks damages for shareholders between April 19, 2023 and June 22, 2025.
A Florida jury on August 1 found Tesla 33% responsible for a 2019 crash involving its self-driving software, which killed a 22-year-old woman and injured
her boyfriend, and ordered it to pay about $243 million in damages to victims. Tesla blamed the driver and plans to appeal.
The case is Morand v Tesla Inc et al, U.S. District Court, Western District of Texas, No. 25-01213.