Elon Musk is being sued by shareholders over what he said about Robotaxi
Elon Musk has found himself in trouble with shareholders once again, as investors in Tesla have entered another major lawsuit against the electric car company regarding the recent launch of the self-driving Robotaxi service.
Following significant stock market value declines over the past year as a consequence of Elon Musk's own dwindling reputation, Tesla needed Robotaxi to be the success and game changer that it has been touted for years.
Weeks before Musk officially exited his controversial role in the Trump administration, one investor outlined that Tesla was in a 'code red situation' that presented two clear paths for the company, with one ending in clear failure in the near future.
While Musk's return to Tesla 'full time' saw the company's fortunes rebound, the Robotaxi launch and wider full self driving (FSD) issues have remained a problem for the manufacturer to tackle, and things might just have become more challenging thanks to a new major lawsuit.
Why is Elon Musk being sued by Tesla shareholders?
As reported by Reuters, a new class action lawsuit was proposed on Monday, August 4, from Tesla shareholders that accuses Musk's electric car company of securities fraud.
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The claim, led by shareholder Denise Morand, alleges that Tesla, Musk, current Chief Financial Officer Viabhav Taneja, and his predecessor Zachary Kirkhorn all concealed the risk that their self-driving vehicles and Robotaxi possesed, downplaying their danger as a whole.
This is far from the only issue that Musk and Tesla have faced regarding FSD, as the tech has repeatedly been pushed back and away from promised vehicles.
There have also been a number of worrying incidents involving the self-driving tech, with one car driving itself off the top of a parking garage alongside other incidents of cars running red lights.
Robotaxi appears to have been the catalyst for this particular lawsuit, as the service – which offers a driverless taxi service to customers – launched in specific areas of Austin, Texas in June this year.
The test saw Tesla's stock price decline by 6.1% across the two days following its launch, removing around $68,000,000,000 from Tesla's market value, and any further losses from this class action lawsuit could prove detrimental to the company.
Following the launch, eligible Robotaxi vehicles were seen to be braking suddenly, driving over curbs, entering the wrong lanes, and even dropping passengers off in the middle of multilane roads, which Morand and other plaintiffs will likely be using as evidence of the unsafe nature of the tech.
One commenter on Reddit has expressed their support for the lawsuit despite typically being on the side of Tesla, writing:
"Although I'm a huge fan of Musk and his companies and I'm over the moon with excitement about cars driving themselves, I agree with this lawsuit. The FSD rollout is about a year too early. The build is dangerous and is only at the 99.5% level where 99.99% is needed.
"It was irresponsible to launch it in its current form and frankly lying to investors. I sort of think though that the FSD team truly believe it is safer than a human driver so in that case it isn't lying, just incompetence."
Studies have shown that self-driving cars are typically indeed safer than their human-controlled counterparts, and other Tesla drivers have remarked on how much more unsafe they feel in full control of the wheel, but based on current evidence it's difficult to see Robotaxi specifically as being fully ready for the road.