Tesla, Elon Musk score a win in legal battle over self-driving marketing

A shareholder lawsuit alleging that Tesla (NASDAQ:TSLA) overstated the efficacy and safety of its Autopilot and Full Self-Driving (FSD) technologies, which misled investors and artificially inflated its stock prices.

The investors claimed they suffered significant losses and damages when safety issues related to the technologies dragged Tesla’s (TSLA) stock on several occasions.

U.S. district judge Araceli Martinez-Olguin rejected the allegations, saying shareholders failed to show that Tesla (TSLA) and CEO Elon Musk should be liable for promising fully autonomous, hands-free driving functionality, among other assurances.

“Plaintiffs fail to connect Musk’s hands-on management with any information that he allegedly learned rendering his statements false or misleading,” she wrote, adding that some of the CEO’s statements addressed future expectations.

The judge also noted that Musk’s $39B stock sales during 2019-2023 did not show he was cashing out at other shareholders’ expense before the technologies’ issues came to light.

She dismissed the lawsuit without prejudice, giving the plaintiffs time till October 30 to amend their complaint.

Tesla (TSLA) still faces other consumer complaints and regulatory investigations related to Autopilot and FSD.