Tesla Driver Assistance Systems Face Lawsuit Over Misleading “Self-Driving” Claims

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Tesla Faces Class-Action Lawsuit Over Misleading Self-Driving Claims

Electric Car Maker’s Ambitious Autonomy Goals Collide with Legal Reality

Just as Tesla CEO Elon Musk doubles down on self-driving technology as the company’s future, a new lawsuit throws a wrench into those plans. A California judge has allowed a proposed class-action lawsuit to proceed, accusing Tesla of misleading consumers about the capabilities of its cars’ self-driving features.

A History of Overpromising and Underdelivering

The lawsuit centers on claims Tesla made in 2016, stating all its upcoming vehicles would be equipped with the necessary hardware for full self-driving functionality. This bold statement came coupled with an even more ambitious promise: these cars would be able to navigate autonomously from Los Angeles to New York City by the end of 2017.

However, Judge Rita Lin, in her Wednesday order, acknowledged the potential for deception in these claims. “If Tesla meant to convey that its hardware was sufficient to reach high or full automation,” she wrote, “the complaint plainly alleges sufficient falsity.”

Musk’s “Balls to the Wall” Approach and the FSD Misnomer

Despite the lack of concrete progress, Musk remains bullish on autonomy. In April, he declared Tesla is “going balls to the wall for autonomy,” further cementing the company’s commitment to the self-driving robotaxi concept. This unwavering focus on a future technology comes at a cost, however. For over a decade, Musk has hyped self-driving capabilities, convincing customers to invest thousands of dollars in Tesla’s Full Self-Driving (FSD) feature. The issue? The name itself is misleading. FSD requires constant driver supervision and falls far short of true autonomy. Yet, Musk has repeatedly downplayed this gap, promising the technology is on the cusp of living up to its aspirational branding.

Regulatory Scrutiny and Safety Concerns

Tesla’s self-driving ambitions are facing challenges beyond lawsuits. The National Highway Traffic Safety Administration (NHTSA) is currently investigating whether a previous recall of over 2 million Tesla vehicles adequately addressed safety risks associated with the Autopilot driver-assistance system. This probe joins a growing list of regulatory investigations and lawsuits accusing Tesla of exaggerating its progress on self-driving technology.

California Resident Leads the Charge for Consumer Justice

The lawsuit’s lead plaintiff, California resident Thomas LoSavio, purchased a new Tesla in 2017 and paid an additional $8,000 for FSD. His complaint alleges that statements by Tesla and Musk led him to believe his car would soon possess self-driving capabilities. However, by 2022, Tesla had yet to produce “anything even remotely approaching a fully self-driving car,” according to the lawsuit.

LoSavio’s complaint represents a broader class of Tesla owners who purchased or leased vehicles with Autopilot, Enhanced Autopilot, or FSD since 2016.

Judge Allows Lawsuit to Proceed, but Questions Remain

While Judge Lin didn’t rule on the ultimate merits of the claims, she acknowledged that specific statements made in 2016, such as “all Tesla vehicles produced in our factory now have full self-driving hardware” and the promise of coast-to-coast autonomous driving by the end of 2017, could be considered misleading. She allowed certain negligence and fraud claims to move forward, while dismissing others. This ruling paves the way for further investigation and potential financial consequences for Tesla.

The judge will make a separate decision on whether the lawsuit can proceed as a class action, which could significantly increase the potential damages awarded.

The Road Ahead: A Course Correction for Tesla?

This lawsuit serves as a significant setback for Tesla’s self-driving ambitions. It forces the company to confront the gap between its marketing rhetoric and the reality of its current technology. The coming months will reveal whether Tesla chooses to adjust its messaging around self-driving capabilities or continues to walk a tightrope between ambition and accountability.