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While Tesla's apparently "staged" marketing video from 2016 was not as brazen as Nikola's stunt with a roll-it-down-the-hill electric truck, the ad managed to raise enough questions to materially dent the EV giant's credibility. Now, a group of plaintiffs are claiming that the company missold its FSD package subscription by hyping the software's capabilities, winning for themselves the coveted "class-action lawsuit" distinction, and overshadowing a string of positive developments for Tesla in recent days, including the imminent launch of FSD (supervised) in Japan.
Tesla's Latest FSD-Related Class-Action Lawsuit
To wit, a federal judge in California has now certified a class-action lawsuit against Tesla for hyping the autonomous driving capabilities of its vehicles.
Tesla and Elon Musk have repeatedly claimed over the years that all vehicles produced since 2016 have the requisite hardware for Level 5 autonomy.
Recently, however, Tesla conceded that its vehicles equipped with the relatively newer Hardware 3 (HW3) configurations were insufficient to handle the latest versions of its FSD software. The EV giant intends to upgrade the HW3 vehicles of all customers who purchased the FSD software stack to HW4 configurations.
Coming back to the class-action lawsuit, Tesla maintained during the legal proceedings that it did not missold its FSD software, relying on disclosures that said that its FSD stack was subject to "validation and regulatory approval."
Judge Rita F. Lin, however, disputed Tesla's stance, noting the existence of enough evidence to suggest that "class members were exposed to the Hardware Statement from October 2016 to August 2024." Consequently, the judge has now allowed the class-action lawsuit against Tesla to proceed.
Of course, this is not the first FSD-related lawsuit that Tesla has or is currently facing. These litigations can be broadly divided into two categories:
- Misleading marketing - in addition to today's class-action lawsuit, the company is also facing a high-profile litigation from the California DMV, which alleges deceptive marketing by Tesla of its Autopilot and FSD software stacks.
- Product liability cases which relate to various accidents where the FSD might have been active.
Positive Developments
All is not doom and gloom for Tesla, however. For one, a William Blair analyst believes the EV giant could generate $250 billion in revenue from its robotaxis by 2040.
And, Tesla has just launched its Model Y L in China, hoping to jump-start momentum in the world's largest EV market.
Finally, after launching FSD (supervised) in China and a number of EU countries, Tesla is now poised to launch its signature autonomy-related software stack in Japan.
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