Tesla shareholders have filed a proposed class-action lawsuit against Elon Musk and the electric vehicle maker, accusing them of securities fraud for allegedly concealing significant risks associated with the company's self-driving vehicles.
The lawsuit, filed on Monday night, cites a public test of Tesla's self-driving taxis in late June near the company's headquarters in Austin, Texas. The test reportedly showed vehicles speeding, braking suddenly, driving over a curb, entering the wrong lane, and dropping off passengers in the middle of multilane roads. The US National Highway Transit Safety Administration (NHTSA) is investigating the pilot test.
Shareholders allege that Musk and Tesla repeatedly overstated the effectiveness and prospects of their autonomous driving technology, thereby inflating Tesla's financial prospects and stock price. Tesla's share price fell 6.1% over two trading days after the test began, wiping out about $68bn of market value. The lawsuit specifically points to Musk's assurance on an April 22 conference call that Tesla was 'laser-focused on bringing Robotaxi to Austin in June' and the company's claim that its approach would deliver 'scalable and safe deployment across diverse geographies and use cases'.
In addition to Musk, Tesla's chief financial officer Vaibhav Taneja and his predecessor Zachary Kirkhorn are also named as defendants. Tesla has not yet responded to requests for comment.
The expansion of Robotaxis is seen as crucial for Tesla amid falling demand for its ageing electric vehicles and a backlash over Musk's politics. Musk claims he will offer the service to half of the US population by year's end, but must first convince regulators and assure the public of its safety. He says the service has expanded to the San Francisco Bay Area, though regulations there prevent paid autonomous rides without a renewed permit.
The lawsuit follows a Florida jury ruling on August 1 that found Tesla 33% responsible for a 2019 crash involving its self-driving software, which killed a 22-year-old woman and injured her boyfriend. The jury ordered Tesla to pay about $243m in damages. Tesla blamed the driver and plans to appeal.
