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Tesla and Elon Musk sued over Robotaxi claims

Elon Musk, Tesla and other companies were accused of securities fraud by investors who claimed that they had concealed the risk associated with the self-driving cars, such as the Robotaxi.

The class action lawsuit was filed Monday night following Tesla's public demonstration of its robotaxis at the end of June in Austin, Texas.

The test revealed vehicles that were speeding, breaking suddenly, driving on a curb or entering the wrong lane and dropping passengers in the middle multilane roads.

Tesla's stock price dropped 6.1% in two days of trading after the test, wiping $68 billion from its market value.

Musk and Tesla's electric vehicle maker have been accused of overstating their autonomous driving technology and its prospects, and inflating Tesla’s financial prospects.

The shareholders cited Musk's assurances on a conference call on April 22 that Tesla "was laser-focused on bringing Robotaxi to Austin in the summer" and Tesla's claim on that day that it would be "scalable and safe across diverse geographies, use cases and technologies."

Tesla did not respond to comments on Tuesday. Viabhav Tania and Zachary Kirkhorn, the former Chief Financial Officer of Tesla, are also named as defendants.

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Tesla is facing a declining demand for its older electric vehicles, as well as a backlash against Musk's political views.

Musk, the richest man in the world, wants to provide the service to the half of the U.S. by the end of the year, but he must convince regulators that his technology is safe and assure the public.

Denise Morand is the lead plaintiff in Monday's federal court lawsuit filed by Tesla shareholders. The suit seeks damages between April 19, 2020 and June 22, 2025.

A Florida jury found Tesla 33 percent responsible for a crash in 2019 involving its self driving software. The crash killed a woman aged 22 and injured her boyfriend. It ordered Tesla to pay $243 million to the victims. Tesla has blamed the driver for the crash and intends to appeal.

This case is Morand v Tesla Inc et al., U.S. District Court for the Western District of Texas. 25-01213. Reporting by Jonathan Stempel, New York; editing by Giles Elgood

(source: Reuters)