Tesla and Elon Musk face shareholder lawsuit over Autopilot safety risks after market value plummets by $38 billion

On Monday, Tesla and its CEO, Elon Musk, were sued by shareholders over alleged false claims about the company’s self-driving capabilities, according to a report. The investors, including Thomas Lamontagne, accused Tesla of a four-year-long process of defrauding them by misleading them about the potential risks associated with its self-driving technology, which they claim poses a significant threat of accidents and injuries. Regulators have reportedly recalled several vehicles due to high-profile accidents believed to have been caused by Tesla’s self-driving technology.

In February 16, the National Highway Traffic Safety Administration recalled 362,000 Tesla vehicles due to worries about the FSD software causing unsafe behavior at intersections. This led to a 5.7% decrease in the company’s stock price, equivalent to a $38.6 billion loss in market value. Shareholders argue that this drop in stock price was one of several examples in which the company’s claims about self-driving capabilities damaged shareholder value. Elon Musk was previously sued by drivers in September for similar false assertions about FSD.

Tesla denies allegations of fraud, stating that it has not yet achieved its ambitious goals. The company’s lawyers argued in a November filing that “mere failure to realize a long-term, aspirational goal is not fraud,” as reported by CNN. Self-driving technology has come under increased scrutiny in recent months, with Tesla’s co-founder Martin Eberhard referring to it as “crap.”


Photo Credit: Tesla

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