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| A Tesla Robotaxi on the streets in Austin. Joel Angel Juarez/REUTERS |
Tesla and CEO Elon Musk are facing a proposed class action lawsuit from shareholders who allege the company failed to disclose serious safety issues with its long-promised robotaxi service.
Filed Monday in a Texas federal court, the lawsuit claims Tesla misled investors about the readiness and safety of its autonomous driving technology, overstated its capabilities, and withheld key information about operational problems.
According to the complaint, “There was thus a significant risk that the Company’s autonomous driving vehicles, including the Robotaxi, would operate dangerously and/or in violation of traffic laws.”
Robotaxi test raises red flags
Tesla officially debuted its robotaxi a fully autonomous ride-hailing service on June 22. But the highly anticipated launch was marred by a series of performance issues.
Videos posted by influencers and Tesla shareholders who participated in the Austin test drive showed troubling behavior: cars driving in the wrong lane, exceeding posted speed limits, braking erratically, and struggling to park without human intervention.
The National Highway Traffic Safety Administration (NHTSA) confirmed it was reviewing the incidents captured in the videos to determine if safety regulations were violated.
Stock drop follows safety concerns
The shareholder lawsuit notes that Tesla’s share price fell 6.05% over June 24 and June 25 after reports of the robotaxi’s irregularities surfaced and the NHTSA announced its review.
Investors say this drop reflects the market’s reaction to the perception that Tesla’s autonomous technology a cornerstone of Musk’s vision for the company might be riskier than advertised.
Deadly Autopilot crash verdict adds pressure
The complaint also cites the August 1 jury verdict in a Florida federal court, where Tesla was found liable for a fatal crash involving a vehicle operating in “Autopilot” mode.
The jury awarded $329 million in total damages to the family of Naibel Benavides Leon and her boyfriend, Dillon Angulo, including $242.5 million in punitive and compensatory damages.
Miguel Custodio, a personal injury lawyer at Custodio & Dubey LLP, told Truth Sider prior to news of the shareholder suit that the verdict should serve as a warning to the self-driving car industry.
“If their tech is not 1,000% safe or if the marketing is misleading in any way, there is serious legal and financial exposure,” Custodio said. “Everyone welcomes new technology, but not if it is at the cost of human lives.”
Key figures named in the lawsuit
In addition to Tesla and Musk, the complaint names former CFO Zachary Kirkhorn, who served until 2023, and current CFO Vaibhav Taneja as defendants.
Tesla has not yet issued a public statement regarding the lawsuit, and representatives for the company did not respond to Truth Sider’s request for comment.
