Shareholders have initiated a lawsuit against Tesla and its CEO, Elon Musk, alleging securities fraud linked to the automaker’s claims about the safety and capabilities of its self-driving vehicles, including the robotaxi service.
The legal action follows a public demonstration of the robotaxi in late June in Austin, Texas, reported Reuters.
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The lawsuit, filed in a federal court in Austin, is spearheaded by the company’s shareholder Denise Morand and seeks compensation for damages incurred by investors between 19 April 2023, and 22 June 2025.
According to the publication, the vehicles were seen speeding, braking abruptly, mounting curbs, veering into the wrong lanes, and unsafely dropping off passengers in the tests.
This event led to a significant decline in the company’s share price, with a 6.1% drop over two days, resulting in a market value loss of approximately $68bn.
The shareholders have accused the CEO and his company of exaggerating the state of their autonomous driving technology, thus inflating the company’s financial outlook and stock price.
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By GlobalDataNotably, Musk’s claim during a conference call in April about Tesla’s focus on deploying robotaxis in Austin by June, and the company’s assertion of a safe and scalable approach to autonomous driving, have been brought into question.
Tesla has not yet responded to the allegations. Chief financial officer (CFO) Viabhav Taneja and former CFO Zachary Kirkhorn are named as defendants.
This legal challenge adds to Tesla’s ongoing concerns, which include a recent Florida jury verdict holding the company partially liable for a fatal crash involving its self-driving software.
The jury assigned 33% responsibility to Tesla and awarded about $243m in damages. Tesla, which attributed the cause to the driver, intends to appeal the decision.
Moreover, Tesla was reportedly contending with accusations from the California Department of Motor Vehicles (DMV) that it had misled consumers by overstating the capabilities of its autopilot and full self-driving technologies.
Tesla recently reported a 12% year-on-year decrease in total revenue for the second quarter (Q2) of 2025, with figures falling to $22.49bn from $25.5bn in the same period last year.
