Elon Musk and Tesla are facing legal challenges over claims about the company’s self-driving technology.
Avg price for a cup of coffee in the US is $3.50
Your car drives itself with FSD Supervised for ~$3.33 a day
— Tesla (@Tesla) August 20, 2025
A federal judge in San Francisco has allowed a class-action lawsuit to move forward, accusing Musk and Tesla of exaggerating the capabilities of its electric vehicles’ autonomous features since 2016. The lawsuit comes as Tesla experiences a 13% drop in global electric vehicle sales in the first half of 2025.
Your Tesla lets you know if there’s a vehicle approaching from either side when you’re backing out of a parking spot pic.twitter.com/6n0hU2VkGH
— Tesla (@Tesla) August 20, 2025
In 2016, Musk announced that all Tesla vehicles would have the necessary hardware for full autonomy, promising future software updates would enable “Level 5” autonomy, where cars could drive themselves under any conditions. However, this promise remains unfulfilled. Tesla also faces a separate federal case in Miami, where a jury found the company partially responsible for a fatal 2019 crash involving its self-driving feature, awarding $243 million in damages.
From @Forbes
Elon Musk’s Self-Driving Tesla Lies Are Finally Catching Up To Him
A federal judge in San Francisco just greenlit a class action lawsuit by Tesla owners to sue the carmaker for exaggerated claims about the self-driving capability
— Jean-Michel Glachant (@JMGlachant) August 20, 2025
Tesla’s legal battles over autonomy
Additionally, Tesla may temporarily lose its ability to sell cars in California if a state judge rules that the company misled consumers about its vehicles’ self-driving capabilities. Experts in the autonomous vehicle industry, such as Phil Koopman from Carnegie Mellon University and Bryant Walker Smith from the University of South Carolina, have noted that these legal issues have been a long time coming and that other companies, like Alphabet’s Waymo, have established themselves as leaders in the robotaxi space.
Tesla has maintained that Musk’s comments about the future of self-driving technology are “puffery” and not meant to be taken literally. However, the company’s continuous promotion of its vehicles’ autonomous capabilities has led to increased legal scrutiny. “Tesla wants to have it both ways,” said Missy Cummings, a George Mason University professor and AI expert.
“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.”
Tesla shares have fallen approximately 2.5% to $321.12 and are down 20% for the year. These developments present significant challenges for Musk and Tesla as they navigate legal and market pressures while attempting to maintain their position as pioneers in the electric and autonomous vehicle industry.