Tesla and its CEO Elon Musk on Monday won the dismissal of a lawsuit accusing them of defrauding shareholders by overstating the effectiveness and safety of the carmaker's self-driving technology to boost its stock price.
US district judge Araceli Martinez-Olguin in San Francisco said shareholders failed to show Tesla and Musk should be liable for falsely promising they were close to delivering technology that would drive safer than humans, but that was "plagued with safety issues" and encouraged inattentiveness.
Tesla vehicles have included "Autopilot" software designed to enhance self-driving capabilities, and the company has sold "full self driving" software upgrades.
Martinez-Olguin said some of Tesla's and Musk's challenged statements were not necessarily false, while others could be excused because they addressed future expectations for the technology.
She said Musk's "hands-on" management did not mean he knew more than he let on, while his nearly $34bn (R585.70bn) profit from selling Tesla shares in the February 2019 to February 2023 class period did not show he was cashing out at other shareholders' expense.
Shareholders said Musk, the world's richest person, received about $39.4bn (R678.72bn) of proceeds from the stock sales, approximately the same as Vermont's gross domestic product.
Lawyers for the shareholders did not immediately respond to requests for comment. Tesla did not immediately respond to similar requests. The judge dismissed the lawsuit without prejudice, meaning shareholders can amend it.
Tesla faces probes by the US department of justice and US securities and exchange commission, as well as a case by the California department of motor vehicles, into its self-driving claims.
Tesla, Musk beat shareholder lawsuit over self-driving promises
Image: Apu Gomes/Getty Images
Tesla and its CEO Elon Musk on Monday won the dismissal of a lawsuit accusing them of defrauding shareholders by overstating the effectiveness and safety of the carmaker's self-driving technology to boost its stock price.
US district judge Araceli Martinez-Olguin in San Francisco said shareholders failed to show Tesla and Musk should be liable for falsely promising they were close to delivering technology that would drive safer than humans, but that was "plagued with safety issues" and encouraged inattentiveness.
Tesla vehicles have included "Autopilot" software designed to enhance self-driving capabilities, and the company has sold "full self driving" software upgrades.
Martinez-Olguin said some of Tesla's and Musk's challenged statements were not necessarily false, while others could be excused because they addressed future expectations for the technology.
She said Musk's "hands-on" management did not mean he knew more than he let on, while his nearly $34bn (R585.70bn) profit from selling Tesla shares in the February 2019 to February 2023 class period did not show he was cashing out at other shareholders' expense.
Shareholders said Musk, the world's richest person, received about $39.4bn (R678.72bn) of proceeds from the stock sales, approximately the same as Vermont's gross domestic product.
Lawyers for the shareholders did not immediately respond to requests for comment. Tesla did not immediately respond to similar requests. The judge dismissed the lawsuit without prejudice, meaning shareholders can amend it.
Tesla faces probes by the US department of justice and US securities and exchange commission, as well as a case by the California department of motor vehicles, into its self-driving claims.
READ MORE:
Aston Martin warns of lower profit on supply chain, China woes
VW cuts 2024 outlook as car demand falters
JLR, Altilium to test EV batteries made with recycled materials
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most read
Latest Videos