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2w ago

Activist Shareholders Sue Tesla and Musk Over Robotaxi Safety Disclosures

Activist investors allege Tesla misled shareholders about serious flaws in its Austin Robotaxi pilot; the board has approved a 96-million-share stock grant to bolster Musk’s stake.

A Tesla Robotaxi on the streets in Austin. The service launched in limited form on June 22, 2025.
A Tesla robotaxi drives on the street along South Congress Avenue in Austin, Texas, U.S., June 22, 2025. REUTERS/Joel Angel Juarez//File Photo
Elon Musk attends the opening ceremony of the new Tesla Gigafactory for electric cars in Gruenheide, Germany, March 22, 2022. Patrick Pleul/Pool via REUTERS/File Photo
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Overview

  • A proposed class action filed in Texas federal court accuses Tesla and Elon Musk of securities fraud for concealing significant safety risks during the June launch of its Austin Robotaxi pilot.
  • The lawsuit cites videos showing Robotaxis speeding, braking abruptly, driving over curbs, entering wrong lanes and dropping passengers in multilane roads without warnings.
  • Plaintiffs seek damages for investors who bought Tesla stock between April 19, 2023, and the start of the Robotaxi rollout on June 22, 2025.
  • Since June 22, Tesla has expanded its Robotaxi operating zone in Austin from roughly 20 square miles to about 80 square miles through two geofence enlargements.
  • Following warnings that activist shareholders threaten his control, Tesla’s board offered Musk a restricted stock package of 96 million shares to raise his ownership to 14.6 percent.