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Shareholders sue Tesla and Elon Musk on heels of deadly autopilot verdict, alleging its robotaxi violates traffic laws

August 5, 2025
in News
Shareholders sue Tesla and Elon Musk on heels of deadly autopilot verdict, alleging its robotaxi violates traffic laws
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A Tesla Robotaxi on the streets in Austin
A Tesla Robotaxi on the streets in Austin. The service launched in limited form on June 22, 2025.

Joel Angel Juarez/REUTERS

A group of Tesla shareholders sued the company and CEO Elon Musk, alleging they weren’t forthcoming about problems with its robotaxi.

The proposed class action lawsuit, filed in a Texas federal court Monday, says Tesla misled investors, failed to disclose problems with its long-in-the-works robotaxi service, and “overstated the effectiveness of its autonomous driving technology.”

“There was thus a significant risk that the Company’s autonomous driving vehicles, including the Robotaxi, would operate dangerously and/or in violation of traffic laws,” the lawsuit said.

Tesla debuted a test of its robotaxis — fully autonomous cars available through a ride-hailing service — on June 22.

There were some hiccups.

According to videos posted by influencers and Tesla shareholder who participated in the test in Austin, some cars drove in the wrong lane, exceeded the speed limit, braked at inappropriate times, and had trouble parking without intervention. The National Highway Traffic Safety Administration said it was looking into the irregularities depicted in videos.

Shareholders appeared unhappy: Tesla’s stock price fell by 6.05% over June 24 and June 25, following reports about the videos and the NHTSA announcement, according to the lawsuit.

The lawsuit also points to the August 1 jury verdict in a Florida federal court over a deadly crash involving a Tesla on “Autopilot” mode.

The jury awarded the family of Naibel Benavides Leon and her boyfriend, Dillon Angulo, a combined $329 million in total damages. It found Tesla responsible for $242.5 million in combined punitive and compensatory damages in the case.

Miguel Custodio, a personal injury attorney at Custodio & Dubey LLP, said that the jury verdict put the automated driving industry “on notice.”

“If their tech is not 1,000% safe or if the marketing is misleading in any way, there is serious legal and financial exposure,” he told Business Insider before news of the shareholder lawsuit. “Everyone welcomes new technology, but not if it is at the cost of human lives.”

In addition to naming Tesla and Musk as defendants, the Monday shareholder lawsuit was also filed against Zachary Kirkhorn, who served as CFO until 2023, and the current CFO Vaibhav Taneja.

Representatives for Tesla didn’t immediately respond to Business Insider’s request for comment.

The post Shareholders sue Tesla and Elon Musk on heels of deadly autopilot verdict, alleging its robotaxi violates traffic laws appeared first on Business Insider.

Tags: autonomous carautopilotBusiness InsidercompanyElon Muskjunejury verdictLawsuitmiguel custodiorobotaxishareholderTeslatesttraffic lawvideo
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