Elon Musk arrives at Donal Trump’s inauguration as President in January.
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A federal judge in San Francisco just greenlit a class action lawsuit by Tesla owners to sue the carmaker for exaggerated claims by CEO Elon Musk and the company about the self-driving capability of its electric vehicles that stretch all the way back to 2016. It’s the latest blow to plans by the world’s richest person to reposition Tesla as a leader in artificial intelligence and autonomous driving amid a dramatic slowdown in its EV sales.
Nine years ago, Elon Musk told reporters that Tesla was taking a bold leap into the future by equipping its electric lineup with all the tech it would ever need to one day operate as truly autonomous vehicles.
“The full autonomy hardware suite will be standard on all vehicles Tesla makes from here on out,” Musk said. When fully utilized at some later date, as the AI-enabled software was refined, an array of digital cameras, ultrasonic sensors and radar would give Teslas full “Level 5” autonomy – a designation indicating a robotic ability to drive under all conditions.
It wasn’t true then and still isn’t.
From hyperloops to solar roofs to trillion-dollar savings from federal budget cuts by DOGE, Musk has developed a reputation for excessive boasts and telling outright whoppers. For years, that habit hasn’t been a big problem for his companies, his image or wealth, but it’s shaping up to be one for Tesla, already stung by a 13% drop in its global EV sales in the first half of 2025.
The class-action suit comes on the heels of a separate federal case in Miami this month in which a jury determined that Tesla bore some responsibility for a fatal 2019 crash that occurred while its Autopilot feature was engaged, and ordered the company to pay $243 million in damages. Meanwhile, the company could temporarily lose its ability to sell cars in California, its top U.S. market, if a judge in a case brought by the state’s Department of Motor Vehicles determines it misled consumers by overstating the self-driving ability of its vehicles.
“The overarching thing is none of this is new. This has all been a long time coming,” said Phil Koopman, an autonomous vehicle tech researcher and professor emeritus at Carnegie Mellon University. “We’re sort of seeing the pieces fall into place now, but it’s not out of the blue by any stretch.”
Neither Musk nor Tesla responded to a request for comment.
The legal setbacks aren’t a huge financial problem, at least so far, but a reputational one as they undercut Musk’s continued rhetoric about Tesla being a leader in autonomous driving, despite hard evidence to support it. Alphabet’s Waymo, which operates commercial robotaxis in five major U.S. cities and is testing in 10 more, has solidified its position as the dominant player in that space. Musk said on Tesla’s results call that the company will ultimately overtake Waymo because its system is much cheaper, though a robotaxi pilot Tesla launched in Austin in June, with human safety drivers in the front seat, suggests it has a long way to go to catch up.
“Right now, there are real robotaxis carrying real people on real roads,” said Bryant Walker Smith, an AV researcher and professor at the University of South Carolina. In July, Smith served as an expert witness for the California DMV in its case against Tesla. “None of them is a Tesla.”
Prior to the start of its test program in Austin, where Tesla is based, the company’s engineers had told regulators that, despite the names Autopilot and Full Self-Driving, its system is technically classified as Level 2 autonomy, providing driver assistance but requiring humans at the wheel to be ready to take over at any time. In its current robotaxi pilot, in addition to a safety tech sitting in the front of the vehicle, Tesla is also relying on remote operators to monitor its fleet and provide driving assistance when problems arise–like almost running into an oncoming train.
Smith, who recently published a study comparing the performance of robotaxis operated by Waymo in the U.S. to those of tech giant Baidu in China, noted that the persistence of Musk’s unrealized self-driving targets is somewhat unique. “There were lots of overly optimistic claims in the early 2010s,” he said. “But other companies have either delivered on or tempered their claims.”
A man steps out of a Tesla Robotaxi in Austin on June 27.
Houston Chronicle via Getty Images
In 2019, at Tesla’s “Autonomy Day,” Musk famously boasted the company would have a million robotaxis on the road by 2020. That didn’t happen, nor did his claim at the same event that Teslas with FSD would become more valuable over time, generating as much as $30,000 in extra income a year for owners who put their cars in a Tesla-run robotaxi network. In its latest monthly pricing reports, the car-buying site iSeeCars notes that used Teslas have lost the most value as a brand this year, falling 5.3% in July.
Puffery
In court cases, attorneys for Tesla have argued that comments by Musk are “puffery,” boastful exaggerations that aren’t meant to be taken literally. Yet that’s not something typically ever seen with auto companies, given that improper concern for customer safety can result in massively expensive liability lawsuits and legal repercussions. Tesla has largely avoided both until recently, despite the fact that an estimated 59 fatalities have been linked to the use of Autopilot and FSD, according to data compiled on Tesladeaths.com.
In the Miami case, jurors determined that most of the responsibility for a fatal accident that killed Naibel Benavides Leon lay with George McGee, the human driver, though Tesla was 33% liable owing to Autopilot’s role. The company is appealing the ruling, but it opens the door to more such suits in the future.
“Tesla wants to have it both ways,” said Missy Cummings, a George Mason University professor and AI expert who advised NHTSA on autonomous vehicles. She was also a witness or consultant on the cases in Miami, San Francisco and for California’s DMV. “They want to sell cars by telling people they can be driven on Autopilot and Full Self-Driving, but then when someone dies, they want to say it was all the driver’s fault and that Tesla only ever claimed that the car was driving-assist” tech, she said.
The ruling in Miami “was a rebuke of this nonsensical approach,” she said. “The jury saw and heard evidence regarding Tesla’s testing program that clearly demonstrated it was not doing due diligence. If you’re going to claim your car can self-drive, then you certainly should be able to show test results that provide solid evidence to this claim.”
Tesla shares fell about 1.8% to $329.31 on Tuesday. They’re down 18% this year.
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Source: https://www.forbes.com/sites/alanohnsman/2025/08/20/elon-musks-self-driving-tesla-lies-are-finally-catching-up-to-him/
