Tesla and Musk have successfully defended against a shareholder lawsuit concerning their commitments related to self-driving technology.
Tesla and its CEO Elon Musk successfully had a lawsuit dismissed on Monday, which accused them of misleading shareholders by exaggerating the safety and effectiveness of the company's self-driving technology to inflate its stock price.
U.S. District Judge Araceli Martinez-Olguin, based in San Francisco, ruled that shareholders did not provide sufficient evidence to hold Tesla and Musk accountable for allegedly making false claims about their technology being on the verge of achieving safer driving than humans, despite it being "plagued with safety issues" that could lead to driver inattention.
Tesla's vehicles are equipped with "Autopilot" software aimed at improving self-driving features, and the company has also marketed "Full Self Driving" software upgrades.
Judge Martinez-Olguin noted that some of the statements made by Tesla and Musk were not definitively false, while others could be justified as they pertained to future technological expectations.
She remarked that Musk's active management style did not imply he possessed more knowledge than he disclosed, and his substantial profit of nearly $34 billion from selling Tesla shares between February 2019 and February 2023 did not indicate he was profiting at the expense of other shareholders.
Shareholders claimed that Musk, recognized as the world's wealthiest individual, garnered approximately $39.4 billion from those stock sales, a figure comparable to Vermont's gross domestic product.
The shareholders' legal representatives did not provide immediate comments, nor did Tesla respond to similar inquiries. The judge dismissed the lawsuit without prejudice, allowing shareholders the opportunity to revise their claims.
Tesla continues to face investigations from the U.S. Department of Justice and the U.S. Securities and Exchange Commission, along with a case from the California Department of Motor Vehicles regarding its self-driving assertions.
The case is identified as Lamontagne v Tesla Inc et al, U.S. District Court, Northern District of California, No. 23-00869.