Elon Musk, Tesla Face Lawsuit From Shareholders Over Self-Driving Safety Claims

The class action claimed that Tesla concealed how its technology "created a serious risk of accident and injury" with false and misleading statements.

Musk reportedly reclaimed the top spot as the world’s richest person.

Source : Getty

Tesla, arguably the most popular electric vehicle (EV) maker in the world, has been sued along with CEO Elon Musk by shareholders in the US over the company's safety claims on the cars' Full Self-Driving and Autopilot features. As reported by Reuters, shareholders in a proposed class action suit filed in a San Francisco federal court, claimed that Tesla has defrauded them over four years. Tesla Chief Financial Officer Zachary Kirkhorn and his predecessor Deepak Ahuja are also defendants.

The class action claimed that Tesla concealed how its technology "created a serious risk of accident and injury" with false and misleading statements. Tesla has been under the scanner for quite some time now due to several fatal crashes in the US. The US National Highway Traffic Safety Administraion (NHTSA) have been investigating Tesla's self-driving claims, and the Securities and Exchange Commission (SEC) was also investigating autopilot claims. Tesla's stock prices have been on a rollercoaster ride ever since news of false company claims started surfacing. 

"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," the complaint said. Tesla is yet to offer a response. 

The case, Lamontagne v Tesla Inc et al, seeks unspecified damages for shareholders of the carmaker from February 19, 2019 to February 17, 2023. 

Meanwhile, Musk reportedly reclaimed the top spot as the world’s richest person, after briefly losing the title to the 73-year-old French tycoon Bernard Arnault. Musk’s wealth has seen a rise by nearly 70 per cent surge in Tesla’s stock price this year. 

Tesla stock has surged about 100 per cent from its intraday low on January 6 as investors pile back into bets on riskier growth stocks amid signs of economic strength and a slower pace of Federal Reserve interest-rate increases. The company has also benefited from more demand for its EVs after cutting prices on several models.