Investors claim Tesla misled the world about how Autopilot and FSD “created a serious risk of accident and injury”
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February 28, 2023 at 19:37
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by Sebastien Bell
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A group of Tesla shareholders have launched a lawsuit against Tesla, its CEO Elon Musk, and others within the company, claiming that they were defrauded over four years by false claims about the effectiveness of its advanced driver assistance functions, leading to billions in losses.
The proposed class action lawsuit was filed in San Francisco federal court on Monday and is led by Thomas Lamontagne, a Tesla shareholder. The suit alleges that the company’s self-driving technologies allegedly “created a serious risk of accident and injury,” and claims that Musk and Tesla made misleading statements that concealed that.
Investors point to investigations by the National Highway Traffic Safety Administration (NHTSA), and a reported investigation into the Musk’s claims about Autopilot by the Securities and Exchange Commission, reports Reuters.
Read: Tesla Recalls 363k Cars Over Full Self-Driving Beta’s Potential To Cause A Crash
Most notable, though, it references a recent NHTSA recall of more than 362,000 vehicles equipped with FSD software, because of a possible safety issue around intersections. Although Tesla agreed to launch the recall, it disagreed with the safety authority’s analysis.
The investors say that the value of their shares fell several times as these investigations that cast doubt on the effectiveness of Tesla’s Autopilot and Full Self-Driving systems came to light. Most recently, Tesla share prices fell 5.7 percent on February 16 – the equivalent of $38.6 billion in value – following the announcement of the FSD recall campaign.
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“As a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common stock, plaintiff and other class members have suffered significant losses and damages,” per the complaint.
If nothing else, Musk’s companies are facing mountains of legal bills, as the CEO of both Tesla and Twitter (among others) is being sued from multiple angles. In the four months since he took over as CEO of the social media company, it has been sued by six U.S. companies, alleging that the new acquisition has failed to pay them, according to CNBC.
When he first bought Twitter, Tesla shareholders raised alarm bells over the CEO’s divided attentions. This may only serve to further worry them.
