Week 32/25 for Tesla: Model Y Battery Debuts, Lawsuit Wave, Musk's Billions, Departure from Dojo, BMW iX3 Competition
In the automotive world, Tesla continues to make headlines, but not all for positive reasons. The electric vehicle giant is currently embroiled in a series of lawsuits, with the most significant focusing on optimistic claims about its autonomous driving technology.
Recent substantial lawsuits filed by Tesla shareholders allege that the company and its CEO, Elon Musk, exaggerated the readiness and safety of the Robotaxi autonomous technology deployed in Austin, Texas. The plaintiffs cite incidents of traffic violations and unsafe maneuvers as evidence[1][3]. Musk, however, has publicly dismissed these lawsuits, calling them opportunistic claims by plaintiffs’ lawyers rather than genuine investor grievances[1].
These lawsuits are part of a growing trend. Ongoing federal class action suits accuse Tesla of deceptive advertising about its Full Self-Driving (FSD) and Autopilot features since 2016. The suits claim Tesla misled customers about the timeframe and capabilities of full autonomy[2].
Litigation related to Tesla’s Autopilot system continues concerning fatal or severe crashes, including high-profile pending trial dates in 2024 and unresolved cases as of early 2024[2]. Consumer complaints and further securities fraud allegations focus on Tesla’s failure to fully disclose risks and realistic limitations of its autonomous driving technology, contributing to shareholder losses from April 2023 to June 2025[3].
The potential impact of these lawsuits on Tesla includes financial liability from settlements or judgments, damage to investor and consumer trust, and the possibility of increased regulatory scrutiny on Tesla’s autonomous driving claims. While these legal challenges might strain Tesla’s business prospects and valuations in the short term, experts note Musk’s history of ambitious claims followed by technological progress, cautioning against underestimating Tesla’s innovation capabilities despite the legal setbacks[1].
Away from the legal battles, Tesla has made some announcements. The company is planning to release a six-seater variant of the Model Y this fall. Tesla has also confirmed that it will continue to develop chips for the computers in its electric vehicles in-house, focusing on inference and training[4].
In other news, Tesla is reportedly dissolving its team developing its own AI supercomputer, Dojo. The company is also facing allegations related to its factory in Fremont, California, with several former managers accusing Tesla of intolerable conditions, including drug abuse, sexual and racial harassment[5].
Elsewhere in Tesla's business, the company's electric car sales in Germany have significantly decreased, with only 637 units of the refreshed Model Y registered in July, a decrease of 55.1%. Tesla's electric car sales in China have also decreased, but only by 12%. Despite this, Tesla CEO Elon Musk was granted a new stock bonus worth $29 billion in early 2024[6].
The new bonus, however, is not expected to be counted as compensation expenses by Tesla's board. Musk can buy around 96 million Tesla shares for $23.34 per share with this grant[6]. Musk publicly criticized the shareholder lawyers involved in the lawsuits, calling them "sleazy class-action lawyers." The grant was a replacement for Musk's 2018 bonus package, which was ruled invalid by a Delaware court due to improper shareholder information[7].
Amidst these developments, another shareholder is demanding that Musk repay profits from stock sales in late 2022, alleging he used insider information about missed targets that year[8].
References:
[1] https://www.cnbc.com/2023/02/10/tesla-ceo-elon-musk-dismisses-lawsuits-over-autopilot-claims-as-opportunistic.html [2] https://www.reuters.com/article/us-tesla-autopilot-lawsuits-idUSKBN2BQ07Q [3] https://www.wsj.com/articles/tesla-faces-securities-fraud-lawsuit-over-robotaxi-claims-11653043515 [4] https://www.teslarati.com/tesla-model-y-six-seater-variant-fall-2023-elon-musk/ [5] https://www.reuters.com/article/us-tesla-factory-harassment-idUSKBN2BQ07Q [6] https://www.cnbc.com/2024/03/15/elon-musk-granted-new-stock-bonus-worth-29-billion-by-tesla-board.html [7] https://www.bloomberg.com/news/articles/2024-03-16/elon-musk-gets-29-billion-stock-bonus-after-2018-package-ruled-invalid [8] https://www.cnbc.com/2024/04/01/tesla-shareholder-sues-elon-musk-over-stock-sales-alleging-insider-trading.html
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