Tesla is facing serious challenges as shareholders have filed a lawsuit in federal court against the electric vehicle giant and its CEO, Elon Musk. The allegations center around claims of “materially false and misleading statements” regarding the safety of Tesla’s robotaxis and the regulatory hurdles they encounter. This follows the launch of the Robotaxi service in Austin, Texas, on June 22, where a human “safety monitor” is present in the passenger seat, and the robotaxis operate within a restricted area.
Despite taking these precautions, unsettling videos have surfaced online, showing the robotaxis behaving erratically, raising safety concerns. A Bloomberg article from June 23, titled “Tesla Robotaxi Videos Show Speeding, Driving Into Wrong Lane,” details how these autonomous vehicles reportedly violated traffic laws from their very first day in service.
The lawsuit also references another June 23 article, “Tesla Robotaxi Incidents Draw Scrutiny From US Safety Agency,” highlighting actions taken by the National Highway Traffic Safety Administration (NHTSA) regarding the safety incidents captured in social media videos. Furthermore, the lawsuit points out that Tesla’s stock experienced a downturn following reports of the robotaxi issues in Austin.
Watch this Tesla supervised “Robotaxi” go haywire and drive on the wrong side of the road on day one of its Austin launch. This dangerous and defective software should be banned.
— Dan O’Dowd (@realdanodowd.bsky.social) June 23, 2025 at 9:10 AM
Moreover, the lawsuit points to an earnings call from April where Musk claimed, “The team and I are laser focused on bringing robotaxi to Austin in June.” This statement came shortly after Tesla reported a staggering 71% decline in profits. Musk’s enthusiasm about future developments raises eyebrows, particularly as he has a pattern of overpromising regarding Tesla’s autonomous capabilities. There is even a Wikipedia page dedicated to Musk’s forecasts for fully autonomous driving, many of which remain unfulfilled.
The lawsuit, initiated by Pomerantz LLP in U.S. District Court, Western District of Texas, is entitled Morand v. Tesla Inc. et al. Alongside Musk, Chief Financial Officer Vaibhav Taneja and former Tesla CFO Zachary Kirkhorn are named as defendants, accused of profiting through insider sales of Tesla shares while prices were artificially inflated. Their responses to these allegations are currently pending as the lawsuit aims for class action status.
This year has been particularly challenging for Tesla, as sales have been declining. Factors such as Musk’s political affiliations and controversial public behavior may have impacted consumer sentiment. In a related legal development, a jury in Miami recently ordered Tesla to pay $240 million (approximately €227 million) in damages regarding its Autopilot technology.
While the Tesla Robotaxi service is now operational, it is notably different from Musk’s more ambitious Cybercab project unveiled in October 2024. The Cybercab aims to be a no-pedal electric vehicle, while the current Robotaxi service is based on the standard Tesla Model Y. Musk predicts the Cybercab will launch in the next 2-3 years, although many are skeptical about the timeline given Musk’s track record.
Additionally, reports indicate that Tesla has also initiated its robotaxi service in San Francisco as of July 31. However, there is some ambiguity regarding the specifics of this launch. The California Public Utilities Commission clarified that Tesla describes it as an “employee-only taxi service to friends and family of employees,” but Musk has suggested a broader initiative through social media.
Tesla has not provided a response to inquiries regarding these issues. Since disbanding its PR department in 2020, any direct communication from the company has been scarce. Musk’s history with the media, highlighted by his infamous auto-responder that replies to journalist queries with a poop emoji, reinforces this uncommunicative approach.
What is Tesla’s Robotaxi service and how does it work? The Robotaxi service employs a fleet of Tesla vehicles that operate autonomously within designated areas, designed to provide a taxi-like experience while supervised by a human monitor.
Are there safety concerns associated with Tesla’s Robotaxi? Yes, multiple incidents have raised safety concerns about the autonomous operation of the robotaxis, prompting scrutiny from safety agencies.
What are the implications of the ongoing lawsuit against Tesla? The lawsuit could potentially lead to significant financial repercussions for Tesla and its executives if shareholders prove their case regarding misleading statements.
How have Tesla’s stock prices been affected by these issues? Reports of safety incidents and the ongoing lawsuit have contributed to a noticeable decline in Tesla’s stock prices.
What is the future outlook for Tesla and its autonomous vehicles? While Tesla continues to develop its robotaxis and the upcoming Cybercab, skepticism persists regarding the timelines and safety guarantees associated with their rollouts.
In closing, Tesla’s journey in the autonomous vehicle market is rife with challenges and uncertainties. If you want to stay updated on this rapidly evolving landscape, be sure to explore more related content at Moyens I/O.