Tesla finds itself back in legal crosshairs as a California federal judge has officially certified a class-action lawsuit over the company’s long-standing claims about its Full Self-Driving (FSD) technology.
The lawsuit alleges that Tesla and Elon Musk oversold the capabilities of FSD by insisting that every car since 2016 had the necessary hardware for full autonomy – claims now under heavy scrutiny.
Judge Rita F. Lin ruled there was enough evidence that Tesla buyers were exposed to these bold promises between October 2016 and August 2024. This decision opens the door for thousands of customers to press forward with the case, arguing they were misled into paying for software that still requires constant supervision and has not delivered the Level 5 autonomy once promised.
At the center of the dispute is Tesla’s hardware evolution. The company recently admitted that its Hardware 3 (HW3) system, once pitched as future-proof, cannot handle the latest versions of FSD. To remedy this, Tesla plans to upgrade eligible owners to Hardware 4 (HW4), a concession critics say undercuts years of marketing.
This lawsuit isn’t Tesla’s only headache. The California DMV is also pursuing action over allegedly deceptive marketing, while accident-related product liability cases continue to pile up. Together, these challenges paint a picture of mounting legal risk surrounding Autopilot and FSD.
Yet Tesla isn’t without good news. The company just rolled out the Model Y L in China, a key market for EV dominance, and is preparing to launch FSD (supervised) in Japan after similar rollouts in Europe and China. Analysts also remain bullish about Tesla’s robotaxi ambitions, with William Blair forecasting potential revenues of $250 billion by 2040 if the technology matures.
Still, for many observers, the courtroom drama threatens to overshadow the company’s global expansion. While Tesla pushes ahead with its bold vision, the legal system is now forcing the automaker to reckon with its past promises.