A shareholder lawsuit which accused Tesla and its CEO Elon Musk of overstating the effectiveness and safety of the company’s so-called Autopilot and Full Self-Driving (FSD) semi-autonomous driving systems in order to boost stock price has been dismissed by a US court.
Reuters reports the class action, filed in San Francisco, claimed Tesla defrauded shareholders across four years through false and misleading statements which concealed how its driver assistance technology “created a serious risk of accident and injury”.
The lawsuit also stated Tesla’s share price fell on multiple occasions following reports of injuries and deaths related to the systems, including after the US National Highway Traffic Safety Administration (NHTSA) began investigating Tesla’s Autopilot and FSD technologies.
Tesla’s share price reportedly fell by 5.7 per cent in February this year, after the NHTSA forced a recall of more than 362,000 vehicles equipped with beta versions of FSD due to safety concerns.
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The news agency reports judge Araceli Martinz-Olguin said shareholders have failed to show how Tesla and Mr Musk should be liable for falsely promising they were close to delivering safe driving software which was “plagued with issues” and encouraged inattentiveness, as the lawsuit claimed.
While Autopilot provides common semi-autonomous driver aids such as adaptive cruise control and highway lane-change assist, Tesla claims Full Self-Driving can stop, steer and accelerate with the ability to follow navigation.
The lawsuit said that “as a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the company’s common stock, plaintiff and other class members have suffered significant losses and damages”.
According to Reuters, Ms Martinez-Olguin said some of Tesla’s and Mr Musk’s statements were not necessarily false, while others could be excused because they regarded future technology expectations.
She said Mr Musk’s “hands-on” management did not mean he knew more than he led others to believe, while his profit of nearly US$34 billion (A$49.2 billion) from selling Tesla shares in the February 2019 to February 2023 were not indicative that he was cashing out at the expense of other shareholders.
The lawsuit was reportedly led by shareholder Thomas Lamontagne, who was seeking unspecified damages for Tesla shareholders from February 19, 2019 to February 17, 2023.
Current Tesla CFO Zachary Kirkhorn and his predecessor Deepak Ahuja were also reportedly named as defendants.
Reuters reports Tesla’s stock has lost about half its value since peaking in November 2021.
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