Tesla is facing yet another lawsuit from activist shareholders, who are accusing the company and its CEO, Elon Musk, of securities fraud. The shareholders claim that Tesla misled investors about the safety of the vehicles used in the Robotaxi rollout in Austin, Texas, which began on June 22.
According to the lawsuit filed in Texas federal court, videos show the Robotaxi vehicles speeding, exhibiting sudden braking, driving over curbs, entering the wrong lane, and dropping passengers off in the middle of multilane roads. The plaintiffs are seeking damages for shareholders between April 19, 2023, and June 22, 2025.
Despite operating for less than two months, Tesla’s Robotaxi platform in Austin has already expanded its geofence twice. The geofence sizes have increased from approximately 20 square miles at the start to around 80 square miles as of August 3, 2025. In the six weeks of operation, only one incident has been reported to the Austin Government as a “Safety Concern” in June 2025. Since July 2023, a total of 130 incidents have been reported for autonomous vehicle operations in Austin, with Waymo leading with 73 incidents.
Elon Musk has expressed concerns about activist shareholders and their potential impact on Tesla and his position as CEO. During the Q2 Earnings Call, Musk emphasized the importance of his control over the company to ensure its direction while acknowledging the possibility of being ousted by activist shareholders. In an effort to secure Musk’s stake in the company, Tesla’s Board has offered him a 96 million share pay package of restricted stock, increasing his stake from 12.9 percent to 14.6 percent.
As Tesla continues to navigate challenges from activist shareholders and legal battles, the company remains focused on advancing its autonomous vehicle technology and expanding its Robotaxi services in Austin and beyond. The outcome of the lawsuit and Musk’s ongoing concerns about shareholder activism will undoubtedly shape the future trajectory of Tesla and its leadership.