Reuters on Tuesday reported that the shareholders alleged securities fraud for concealing the risk associated with the company’s self-driving vehicles, including robotaxis.
Tesla Inc. (TSLA) shareholders have reportedly sued the EV giant and its CEO, Elon Musk, alleging securities fraud.
Reuters on Tuesday reported that the shareholders alleged securities fraud for concealing the risk associated with the company’s self-driving vehicles, including robotaxis. Shareholders accused the electric vehicle maker of overstating the effectiveness of its autonomous driving technology, inflating its business prospects, and stock price.
The proposed class action was filed on Monday night in a federal court in Austin, Texas, the report said. It seeks unspecified damages for shareholders between April 19, 2023, and June 22, 2025.
On Stocktwits, retail sentiment around Tesla trended in the ‘neutral’ territory over the past 24 hours, coupled with ‘low’ message volume. However, according to Stocktwits data, retail chatter around Tesla jumped 273% over the past 24 hours.
Tesla pilot launched its robotaxis in a specific area within Austin in June, and several issues were identified, including speeding, sudden braking, entering the wrong lane, and more. The company has since then expanded the service area, and Musk has also talked about expanding the service into other major cities.
Some of Tesla’s consumer vehicles are also equipped with a driving assistance system called Full Self-Driving (Supervised), an advanced version of its Autopilot driving assistance software. Neither software, however, makes the vehicle autonomous and requires the driver to maintain active attention and take over if needed. Musk, however, has reiterated that FSD will enable fully autonomous driving in time.
Last week, Tesla was ordered to pay $243 million in an Autopilot crash case by a jury in Miami. The jury ruled that the EV maker was responsible because its technology had failed, and the full brunt of the blame cannot be put on a reckless driver, even if he did admit to being distracted by his cell phone. One-third of the blame was assigned to the Elon Musk-owned company, and two-thirds to the driver.
The Autopilot crash in question occurred in 2019 and killed a young couple who were out stargazing.
TSLA stock is down by 24% this year but up by about 55% over the past 12 months.
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