Tesla’s FSD Nightmare: Judge Greenlights Massive Class Action Lawsuit Against Elon’s Autonomous Dreams

Tesla's Full Self-Driving promises just hit a massive legal roadblock—and shareholders are bracing for impact.

A California judge just handed down the ruling every Tesla bear has been waiting for: class action status for thousands of owners who claim they bought into what one plaintiff calls "the most expensive vaporware in automotive history."

The case alleges Tesla knowingly sold FSD capabilities that were nowhere near operational—while collecting billions in upfront payments from optimistic early adopters.

Legal experts predict this could become one of the largest automotive consumer lawsuits in history, with potential liabilities stretching into the billions. Tesla's legal team argued vehemently against class certification, claiming each customer's experience varied too widely—but the judge wasn't buying what Elon was selling.

Remember when traditional automakers laughed at Tesla's valuation? They're not laughing anymore—they're taking notes for their own compliance departments. Meanwhile, Tesla's legal team just got a crash course in what happens when you promise Mars but deliver a golf cart.

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Judge Rita Lin explained that many buyers likely saw Tesla’s marketing between October 2016 and August 2024, which included the “Autopilot” section of its website, blog posts, earnings calls, and Elon Musk’s 2016 press conference. She noted that while most automakers rely on dealers and wide-scale ads, Tesla’s direct-to-consumer model made it more likely that potential buyers visited its site and were influenced by those claims. Tesla argued that not everyone saw the statements or found them important, but the judge said Tesla’s unique marketing made this case different from most.

Interestingly, the certified class includes people who bought the FSD package during specific timeframes and chose not to be bound by Tesla’s arbitration agreement. However, the judge excluded buyers of the Enhanced Autopilot package after saying that it didn’t promise full self-driving capabilities, so Tesla’s alleged misstatements wouldn’t have affected their decisions. The case, officially titled In re Tesla Advanced Driver Assistance Systems Litigation, comes as regulators continue to investigate whether Tesla’s self-driving tech is safe, especially since it’s a key part of the company’s future robotaxi plans.

What Is the Prediction for Tesla Stock?

Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 14 Buys, 15 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $307.23 per share implies 7.7% downside risk.