Tesla, Inc. (TSLA) Misstated the Efficacy, Viability, and Safety of the Company’s Autopilot and FSD Technologies
A shareholder filed a class action on behalf of all persons or entities that purchased or otherwise acquired Tesla (NASDAQ: TSLA) common stock between February 19, 2019 and February 17, 2023, for violations of the Securities Exchange Act of 1934. Tesla designs and manufacturers electric vehicles, battery energy storage, solar panels and roof tiles, and related products and services.
According to the complaint, in 2014, Tesla announced Tesla Autopilot, a suite of purportedly advanced driver-assistance system (“ADAS”) features including automated lane-centering traffic-aware cruise control, lane changes, semi-autonomous navigation, and self-parking. Since then, the Company has touted refinements and enhancements to support the ADAS and Autopilot features, including so-called “Full Self-Driving” (“FSD”) software, which purportedly enables Tesla vehicles to drive autonomously to a destination entered in the car’s navigation system.
During the class period, defendants failed to disclose that: (i) they had significantly overstated the efficacy, viability, and safety of the Company’s Autopilot and FSD technologies; (ii) contrary to their representations, Tesla’s Autopilot and FSD technologies created a serious risk of accident and injury; and (iii) this subjected Tesla to an increased risk of regulatory and governmental scrutiny and enforcement action, as well as reputational harm.
On August 16, 2021, media outlets reported that the National Highway Traffic Safety Administration (“NHTSA”) had opened a formal investigation into Tesla’s Autopilot system after a series of collisions with parked emergency vehicles. On June 3, 2022, media outlets reported that the NHTSA issued a formal inquiry to Tesla about the Autopilot and FSD features for certain models after receiving complaints from more than 750 owners of the vehicles about sudden and unexpected braking with no immediate cause.
Then, on January 27, 2023, media outlets reported the SEC was investigating statements by Elon Musk concerning the Autopilot system, including whether he had made inappropriate forward-looking statements regarding the Autopilot system. On this news, Tesla’s stock fell over 6%.
On February 16, 2023, media outlets reported that the NHTSA had ordered a recall of nearly 363,000 Tesla vehicles equipped with the Company’s FSD “Beta” software, stating that the software may allow the equipped vehicles to act “in an unlawful or unpredictable manner,” increasing the risk of a crash. On this news, Tesla’s stock fell 5.69%.
Finally, on February 18, 2023, media outlets reported that a Tesla had crashed into a fire truck that was responding to an earlier accident, killing the driver and injuring a passenger and four firefighters. News reports linked the crash with prior reports of Tesla vehicles crashing into stationary emergency vehicles because of poorly performing ADAS technologies, increasing market and public concerns regarding the Autopilot system in Tesla’s vehicles. On this news, Tesla’s stock price fell $10.94, or 5.25%, to close at $197.37 per share on February 21, 2023.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Tesla. Shareholders who want to act as lead plaintiff for the class must file their papers by April 25, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.