The proposed class action of national scope has charged Tesla and Musk with deceptively marketing Autopilot and other autonomous driving technologies as operational or "imminent" since 2016, prompting consumers to pay a premium for their vehicles.
US District Judge Rita Lin, based in San Francisco, ruled that owners are entitled to pursue claims of negligence and fraud, contingent upon their reliance on Tesla's assertions about the vehicles' hardware and their capability to autonomously traverse the US from coast to coast.
Judge Lin, without commenting on the case's substance, stated that "should Tesla have intended to suggest that its hardware was adequate for achieving high or complete automation, then the complaint adequately indicates sufficient deceit."
The judge did, however, dismiss several other allegations.
The lawsuit is spearheaded by Thomas LoSavio, a retired lawyer from California, who claimed he paid an additional $8,000 in 2017 for Full Self-Driving capabilities on a Tesla Model S, believing it would enhance driving safety as his reflexes waned with age.
Six years on, LoSavio asserts he is still awaiting the technology, with Tesla proving "not even remotely" capable of delivering a fully autonomous vehicle.
The legal action seeks unspecified compensation for individuals who, since 2016, have purchased or leased Tesla vehicles equipped with Autopilot, Enhanced Autopilot, and Full Self-Driving functionalities.
For several years, Tesla has been under federal investigation to determine if its autonomous driving technology contributed to any fatal accidents.
Separately, federal prosecutors are probing whether Tesla engaged in securities fraud or wire fraud by misleading investors regarding the self-driving potential of its vehicles, as per three individuals acquainted with the situation.
Tesla has maintained that Autopilot enables vehicles to steer, accelerate, and brake within their lanes, and Full Self-Driving allows them to adhere to traffic signals and switch lanes.
However, it has conceded that neither system renders the vehicles autonomous, nor does it absolve drivers from maintaining vigilance on the road.
The implications of the recent ruling against Tesla's motion to dismiss a lawsuit over its Autopilot and Full Self-Driving features could be significant for the company. It could set a legal precedent for other cases involving Tesla's Autopilot and Full Self-Driving technologies. This could open the door for more lawsuits from customers who feel misled by Tesla's marketing claims.
If the lawsuit results in damages being awarded to the plaintiffs, it could have a financial impact on Tesla. The lawsuit seeks unspecified damages for people who bought or leased Tesla vehicles with these features since 2016 so this will add up.
Finally, the ruling and the ongoing lawsuit could affect Tesla's reputation, particularly regarding the trustworthiness of its marketing and the reliability of its technology. This could influence consumer perception and future sales.
