(Reuters) — Tesla Inc and its CEO, Elon Musk, were sued on Monday by shareholders who accused them of exaggerating the effectiveness and safety of their electric vehicles’ autopilot and full self-driving technology.
In a proposed class action filed in San Francisco federal court, shareholders said Tesla defrauded them over four years with false and misleading statements concealing how its technologies, suspected as a possible cause of several fatal accidents, “created a serious risk of accidents and injuries . “
They said Tesla’s stock price fell several times when the truth became known, including after the National Highway Traffic Safety Administration began investigating the techniques and reported that the Securities and Exchange Commission was investigating Mr. Musk̵7;s autopilot claims.
The stock also fell 5.7% on Feb. 16 after NHTSA forced a recall of more than 362,000 Tesla vehicles equipped with Full Self-Driving beta software because they could be unsafe around intersections.
Tesla has said it agreed to the recall, although it disagreed with NHTSA’s analysis.
“As a result of the defendants’ wrongful acts and omissions, and the rapid decline in the market value of the company’s common stock, the plaintiff and other class members have suffered substantial losses and damages,” the complaint said.
Tesla, which has no media department, did not immediately respond to requests for comment.
Monday’s lawsuit, led by shareholder Thomas Lamontagne, seeks unspecified damages for Tesla shareholders from February 19, 2019, to February 17, 2023. Chief Financial Officer Zachary Kirkhorn and his predecessor Deepak Ahuja are also defendants.
Tesla shares on Monday closed up $10.75, or 5.5%, at $207.63, but the stock has lost about half its value since peaking in November 2021.
Mr. Musk, the world’s second-richest person, is expected at Tesla’s investor day on March 1 to promote the company’s artificial intelligence capabilities and plans to expand its vehicle lineup.
The case is Lamontagne v. Tesla Inc. et al, US District Court, Northern District of California, No. 23-00869.