Tesla is facing a new threat from its “activist shareholders,” who have filed a lawsuit against the company and its CEO, Elon Musk. The lawsuit, filed in a Texas federal court, accuses Tesla and Musk of securities fraud for allegedly concealing risks associated with the launch of the Robotaxi service in Austin, Texas.
The shareholders claim that Tesla misled investors about the safety of the vehicles used in the Robotaxi rollout, which began on June 22. Videos reportedly show the vehicles speeding, braking suddenly, driving over curbs, entering the wrong lane, and dropping passengers off in unsafe locations. The lawsuit seeks damages for shareholders between April 19, 2023, and June 22, 2025.
Despite the lawsuit, Tesla’s Robotaxi platform has continued to expand in Austin. In less than two months, the geofence for the service has grown significantly, with two expansions already in place. The platform has been operational for approximately six weeks, with only one incident reported to the Austin Government as a safety concern in June 2025. Since July 2023, when autonomous vehicle operation began in Austin, a total of 130 incidents have been reported, with other companies like Waymo also operating in the area.
Elon Musk has expressed concerns about activist shareholders and their potential impact on Tesla and his role as CEO. During the Q2 Earnings Call, Musk emphasized the need for control over the company to ensure its success but also acknowledged the possibility of being ousted by activist shareholders. In an effort to secure Musk’s stake in the company, Tesla’s Board offered him a significant 96 million share pay package of restricted stock, which would increase his stake to 14.6 percent.
The ongoing legal battle with activist shareholders highlights the challenges faced by Tesla and its leadership. Despite these challenges, Tesla continues to innovate and expand its services, such as the Robotaxi platform, in pursuit of its mission to revolutionize the automotive industry.