Tesla and its CEO Elon Musk are facing a new lawsuit from shareholders who accuse the company of hiding the dangers of its self-driving technology. The suit was filed Monday night in Austin, Texas, right after Tesla’s first public robotaxi test in the city.
During that test, the self-driving cars showed worrying behavior. They sped up suddenly, slammed on brakes, drove onto curbs, entered wrong lanes, and even dropped off passengers in the middle of busy roads. These incidents raised serious safety concerns.
After the test began, Tesla’s stock dropped 6.1% over two days, wiping out about $68 billion in market value. Shareholders say Musk and Tesla repeatedly exaggerated how well their autonomous driving system works. They also claim the company boosted its stock price by promising a safe and scalable robotaxi service, including Musk’s April announcement that robotaxis would launch in Austin by June.
Besides Musk, Tesla’s current chief financial officer Viabhav Taneja and former CFO Zachary Kirkhorn are also named in the lawsuit. The legal action aims to recover losses suffered by investors between April 19, 2023, and June 22, 2025.
The robotaxi service is key to Tesla’s future because sales of its current electric vehicles have been dropping. Musk plans to have robotaxis available to half of the U.S. population by the end of the year, but regulators and the public need to be convinced that the technology is safe.
This lawsuit adds to Tesla’s legal struggles. Just last month, a Florida jury found Tesla 33% responsible for a fatal 2019 crash involving its self-driving software and ordered the company to pay $243 million in damages. Tesla plans to appeal that ruling, blaming the driver instead.
The current case, led by Tesla shareholder Denise Morand, is being heard in the U.S. District Court for the Western District of Texas under case number 25-01213. Tesla has not yet responded to requests for comment on the latest lawsuit.