Tesla Faces $68B Stock Hit as Robotaxi Lawsuit Alleges Safety Cover-Up originally appeared on Autoblog.
Tesla’s dream of driverless ride-hailing just took a hard detour—straight into the courtroom.
On August 4, 2025, a group of Tesla shareholders filed a proposed class‑action lawsuit in federal court in Austin, Texas, naming Tesla, CEO Elon Musk, and both current CFO Vaibhav Taneja and former CFO Zachary Kirkhorn as defendants. They accuse Tesla’s leadership of securities fraud, alleging that they overstated the safety and readiness of Tesla’s newly launched Robotaxi service, misleading investors and inflating the company's stock price.
What triggered this legal backlash? It all started with Tesla’s limited Robotaxi rollout in Austin on June 22, 2025, a milestone Musk has long touted as the next frontier of autonomous mobility. The public debut, however, was marred by alarming incidents: videos emerged showing Robotaxis speeding, braking erratically, entering the wrong lanes, driving over curbs, and even dropping off passengers in intersections.
News of these safety issues hit markets fast: Tesla’s stock dropped about 6.05% over two trading days, resulting in an estimated $68 billion loss in market value. The lawsuit underscores that Tesla allegedly concealed these risks, misleading investors about just how close the technology was to being reliable.
Adding fuel to the fire is a recent jury verdict that ordered Tesla to pay around $329 million for its partial liability in a fatal Autopilot-related crash—signaling a troubling legal climate for Tesla’s autonomous driving technology.
The National Highway Traffic Safety Administration (NHTSA) is also investigating. According to reports, the agency is probing incidents captured during the June Robotaxi test in Austin, raising concerns over how the vehicles performed on public roads.
The allegations in the lawsuit span a period from April 19, 2023, to the Robotaxi launch on June 22, 2025, suggesting that these investor complaints have a long-simmering history connected to how Tesla presented its autonomy roadmap
As of now, Tesla hasn’t responded publicly to these specific legal claims.
This lawsuit hits at the heart of Tesla’s narrative: bold promises of swift progress toward full autonomy—and the staggering financial impact when the reality falls short. Critics warn that if Tesla’s innovations can’t be delivered safely, hype alone won’t sustain the company’s valuation—or its legal standing.
Tesla Faces $68B Stock Hit as Robotaxi Lawsuit Alleges Safety Cover-Up first appeared on Autoblog on Aug 16, 2025
This story was originally reported by Autoblog on Aug 16, 2025, where it first appeared.
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