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Tesla Inc. (NASDAQ:TSLA) has been asked to confront a proposed class-action lawsuit claiming the company misled consumers regarding its cars' self-driving capabilities.
This marks a new challenge for the electric vehicle manufacturer, as CEO Elon Musk sees the company's future in autonomous driving.
Tesla is accused of falsely stating in 2016 that all forthcoming cars would have the "hardware needed for full self-driving capability" and could autonomously drive from Los Angeles to New York City by the end of 2017, reported Bloomberg.
Judge Rita Lin of the U.S. District Court noted that the complaint sufficiently alleges that if Tesla intended to suggest its hardware could achieve full automation, it was misleading.
This ruling came in response to Musk's recent affirmation that Tesla is committed to developing self-driving technology, particularly a concept known as the ‘robotaxi'.
Despite Musk's long-standing claims about the imminent arrival of autonomous driving, the Full Self-Driving (FSD) feature still requires driver supervision and falls short of full autonomy.
Tesla also faces several federal investigations, including whether defects in its Autopilot system have caused fatal accidents.
The National Highway Traffic Safety Administration is currently probing whether a recall of over 2 million vehicles effectively addressed Autopilot safety concerns.
Also Read: Tesla Sued In California For Environmental Violations
Thomas LoSavio, a California resident who filed the lawsuit, asserts he paid an additional $8,000 for FSD when he purchased his new Tesla in 2017, based on statements from Tesla and Musk that led him to believe the car would achieve self-driving capabilities shortly.
He claimed that by 2022, Tesla still hadn't delivered a truly autonomous vehicle. The complaint seeks to represent anyone who bought or leased a new Tesla with Autopilot, Enhanced Autopilot, or FSD since 2016.
Judge Lin allowed several fraud and negligence claims to proceed while dismissing others. The decision enables pretrial discovery, with a later determination on whether the lawsuit will be granted class-action status.
Tesla stock has gained more than 4% in the last 12 months. Investors can gain exposure to the stock via two ETFs. They include the Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) and Fidelity MSCI Consumer Discretionary Index ETF (NYSE:FDIS).
Price Action: TSLA shares closed lower by 2.01% at $173.99 on Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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