Tesla and its CEO, Elon Musk, are facing a shareholder lawsuit alleging securities fraud over the company’s promotion of its self-driving technology, including the much-hyped Robotaxi. The class action filed Monday night in federal court in Austin, Texas, claims Tesla misled investors by telling them the company was safe and ready to roll out its autonomous vehicles.
The lawsuit follows Tesla’s first public test of its Robotaxi in late June in Austin, which reportedly revealed alarming performance issues. According to witnesses, the cars were speeding, stopping suddenly, driving over curbs, and making wrong lane entries and even dropping off passengers in the middle of multilane roads. After the test, Tesla shares fell 6.1 percent in two trading days, wiping out about 68 billion dollars in market value.
The shareholders have alleged that Musk and Tesla kept overstating the reliability and future of their self-driving technology. On an April 22 conference call, Musk declared Tesla was “laser-focused on bringing robotaxi to Austin in June,” while the company simultaneously touted its approach as “scalable and safe.” Plaintiffs claim these claims to be misleading and to drive up the stock price of Tesla.
The shareholders, represented by Denise Morand, are claiming damages on behalf of those investors who purchased Tesla stock between April 19, 2023, and June 22, 2025. The suit also names Tesla’s current and former CFOs, Vaibhav Taneja and Zachary Kirkhorn. Tesla has not commented on media requests.
The growth of robotaxis is regarded as an important part of Tesla’s future as it struggles with the decreasing popularity of its older models of electric vehicles and the general criticism of the political views of Musk. With safety issues and regulatory approval still a significant challenge, Musk hopes to roll out the Robotaxi service to serve half of the U.S. population by the end of the year.
To make the legal troubles of Tesla even worse, a Florida jury on August 1 ruled that the company was 33 percent responsible for a fatal 2019 crash involving its self-driving software and ordered it to pay $243 million in damages. Tesla argues that it was the fault of the driver, and it will appeal.
