Tesla, Musk Sued by Shareholders Over Robotaxi Safety Risks

Tesla and its CEO Elon Musk have been hit with a proposed class action lawsuit filed in federal court in Austin, Texas, accusing the electric vehicle giant of securities fraud tied to its autonomous driving technology — specifically, its much-hyped Robotaxi initiative.

The lawsuit was filed Monday night following a turbulent debut of Tesla's Robotaxi test program in late June, during which the self-driving vehicles reportedly demonstrated dangerous behavior. According to the filing, test footage showed robotaxis speeding, braking unpredictably, jumping curbs, drifting into the wrong lanes, and even dropping off passengers in hazardous locations, including the middle of multilane roads.

Following the public demonstration, Tesla's stock dropped 6.1% over two trading sessions — a reaction that shareholders claim reflects the market’s loss of confidence in the viability and safety of the company's autonomous vehicle (AV) platform.

Fraud Allegations and Investor Losses

The plaintiffs — shareholders who purchased Tesla stock between April 19, 2023, and June 22, 2025 — allege that the company knowingly misled investors about the maturity and reliability of its self-driving technology, overstating its potential to drive future growth and inflating Tesla's market value in the process.

The lawsuit asserts that both Musk and Tesla concealed the real safety risks associated with its autonomous systems and the Robotaxi project, which the company has repeatedly promoted as a major pillar of its future business model.

Tesla has long marketed its Full Self-Driving (FSD) system as a near-ready solution, with Musk going so far as to say that the company was "solving autonomy" and that Robotaxis would be on the road by mid-decade. These public statements, the complaint claims, gave investors a false impression of the system’s progress and safety record.

The plaintiffs are seeking unspecified damages tied to their investment losses during the covered time frame.

Robotaxi Test Backfires

Tesla's first public Robotaxi test was intended to showcase the latest version of its Full Self-Driving software, but the performance reportedly raised more safety concerns than confidence. According to user-captured video and eyewitness reports cited in the complaint, the vehicle’s driving decisions appeared erratic and posed dangers to both passengers and other road users.

The poor public rollout now serves as key evidence in the suit, which argues that Tesla's internal knowledge of these issues was not disclosed to investors prior to the demonstration.

Tesla Silent on Lawsuit

As of Tuesday morning, Tesla has not issued a formal response to the lawsuit and did not respond to media inquiries requesting comment.

Elon Musk has not posted publicly about the legal action, though he continues to promote Tesla’s long-term AI and autonomous vehicle roadmap via X (formerly Twitter), where he frequently engages with both fans and critics.

Tesla Faces Investigations and Lawsuits Over AV Safety Messaging

Tesla’s autonomous driving systems have been under the microscope for years — not just from investors, but from regulators in Washington. U.S. agencies including the National Highway Traffic Safety Administration (NHTSA) and the Department of Justice have launched formal investigations into Tesla’s marketing and safety practices tied to its Full Self-Driving and Autopilot features.

These probes center on whether Tesla has misrepresented the readiness or capabilities of its self-driving systems, which critics say can give drivers a false sense of security on the road.

Industry analysts have long warned that exaggerated timelines and unsupported claims around autonomy not only create road safety concerns, but also expose Tesla to lawsuits and regulatory enforcement — both of which are now starting to converge.

This shareholder lawsuit marks a turning point. For the first time, investors are seeking courtroom accountability for the company’s autonomy promises, accusing Tesla of inflating stock value based on technology that may not be ready for public roads.

Tesla Faces Investor Pressure After Robotaxi Test and Lawsuit

Tesla shares fell 6.1% in the two trading days following its first public Robotaxi test, as footage of erratic driving raised fresh doubts about the company’s full self-driving timeline. The decline reflected renewed market skepticism over Tesla’s claims of autonomy readiness — a cornerstone of its future growth strategy.

As of Tuesday, the stock remained under pressure. Investors are now watching for cues in Tesla’s upcoming earnings report, particularly any revisions to its Robotaxi rollout plans.

The lawsuit filed this week could amplify the fallout. If granted class action status, it may compel Tesla to disclose internal communications about its autonomous tech — a development that could reshape both investor expectations and regulatory scrutiny around the company’s most ambitious product line.

Also Read: Tesla Launches Robotaxi Service in Austin — Analysts Say It Could Wipe Out Traditional Car Brands