Musk's Robotaxi Proposal Has Backfired, Leading to Shareholder Lawsuits | Carscoops

      Tesla's recent push for autonomy is facing criticism after incidents have led to a lawsuit and impacted the market.

      The company is being sued for allegedly concealing safety concerns related to its Robotaxi service.

      Reports indicated that Robotaxi vehicles were observed speeding and violating traffic regulations.

      The lawsuit caused a 6 percent decline in Tesla's stock value following these incident reports.

      Elon Musk and Tesla anticipated that the launch of the much-anticipated Robotaxi service in Austin, Texas, would significantly advance the company by providing fully autonomous driving technology to the public. However, the Robotaxi has instead put Tesla in a challenging situation. Both Musk and the company are named in a lawsuit that claims they misrepresented the dangers associated with self-driving systems and exaggerated the automaker's worth.

      A group of shareholders has filed a proposed class action, alleging that Tesla's Robotaxi vehicles in Austin exhibited erratic behavior, including speeding, mounting curbs, swerving into opposing lanes, braking unexpectedly, and even dropping passengers off in the middle of busy streets, as reported by The Economic Times.

      Shareholders Claim Technology Is Unready

      The shareholders assert that Musk and Tesla have repeatedly overstated the capabilities and future potential of the automaker’s autonomous driving technologies, which has driven up its stock price. The lawsuit also criticizes Musk’s statement from April 22, in which he claimed that Tesla was “laser-focused on bringing Robotaxi to Austin in June” and that the service would ensure a “scalable and safe deployment across a variety of locations and scenarios.”

      Wherever Musk Goes, Controversy Follows

      The shareholders have accused Tesla and Musk of securities fraud, arguing that the Robotaxi program presents a “significant risk” to public safety and could infringe upon traffic laws, thus exposing the company to stricter regulatory scrutiny. They also highlighted that Tesla’s stock experienced a roughly 6 percent drop following public reports of incidents involving the Robotaxi fleet.

      Last week, Tesla expanded its Robotaxi service to a designated area in the San Francisco Bay. However, since Tesla lacks regulatory approval for entirely autonomous vehicles in California, all cars in the local Robotaxi fleet have a human driver. Therefore, it is essentially a conventional ride-hailing service rather than a true Robotaxi offering.

      Despite these challenges, Musk remains his usual optimistic self. During Tesla's earnings call in late July, he predicted that “half of the US population will be served by Tesla’s Robotaxi by the end of the year,” indicating that regulatory issues and technical challenges aren't hindering the company’s broader goals.