Tesla Faces Lawsuit Over Autopilot and FSD Safety Claims

By Kevin Armstrong
Tesla is facing a class-action lawsuit from shareholders regarding FSD
Tesla is facing a class-action lawsuit from shareholders regarding FSD
InsideEVs.com

Tesla and CEO Elon Musk are facing a proposed class-action lawsuit from shareholders who accuse the company of overstating the effectiveness and safety of its Autopilot and Full Self-Driving technologies. The lawsuit, filed in San Francisco federal court, alleges that Tesla defrauded shareholders over a four-year period with false and misleading statements that concealed the potential risks of its technologies, which have been suspected as a possible cause of multiple fatal crashes.

Grounds for the Lawsuit

The group of shareholders behind the lawsuit argues that Tesla's misrepresentation of its safety systems created a serious risk of accident and injury, which caused the stock price to fall several times as the truth became known. They claim that when people learned of the ineffectiveness of Tesla's technologies, the stock price dropped, damaging shareholders. The shareholders seek unspecified damages for Tesla shareholders from Feb. 19, 2019, to Feb. 17, 2023.

Tesla has been under scrutiny for some time over the safety of its Autopilot and Full Self-Driving technologies. The National Highway Traffic Safety Administration (NHTSA) is currently investigating Tesla's driver-assistance systems. The automaker has had to pause the rollout to new owners until it can fix issues noted by the organization. Reports of the Securities and Exchange Commission's investigation into Musk's Autopilot claims have also contributed to Tesla's share price decline.

The case is led by shareholder Thomas Lamontagne, who alleges that Tesla and its executives engaged in wrongful acts and omissions, resulting in significant losses and damages for the plaintiff and other class members. The lawsuit alleges that Tesla's executives, including CFO Zachary Kirkhorn and his predecessor Deepak Ahuja, made false and misleading statements about the company's Autopilot and Full Self-Driving technologies, which caused shareholders to suffer losses.

Musk Goes Back to Court

Musk was just recently cleared of wrongdoing in a lawsuit over two tweets he made in 2018 that investors claimed cost them billions of dollars. In the tweets, Musk claimed he planned to take the electric carmaker private at $420 a share and had “funding secured” to do so. The announcement triggered a surge in Tesla’s stocks before they fell back after Musk abandoned the deal. The case was seen as a test of whether Musk could be liable for using Twitter. Musk testified that his tweets were a democratic way to communicate. 

This new case is: Lamontagne v Tesla Inc et al, U.S. District Court, Northern District of California, No. 23-00869.

Tesla Q1 Update on Optimus, Batteries, and Tesla Energy

By Karan Singh
Not a Tesla App

The 2025 Q1 Earnings Call gave us the opportunity to learn about a lot of things, from Unsupervised FSD, to the Robotaxi program, to the update on the more affordable model. There was a lot of news to unpack, but there’s still more.

In this article, we’ll cover Tesla’s updates on Optimus, batteries, and Tesla Energy.

Optimus

Tesla has been working away on their humanoid robot and continues to make progress in software and hardware.

First, Tesla is preparing the Fremont factory for the Optimus pilot production line, which is scheduled for completion later this year. Once it is, wider deployments of Optimus for internal use within Tesla’s facilities are expected as well. Tesla aims to have several thousand Optimus units working in its North American factories by the end of the year once the pilot production line is operational.

Tesla’s goals for production remain extremely lofty - 1 million units per year by 2030. However, they could face some challenges when ramping production.

Key components like the shoulder actuators use specialized permanent and rare-earth magnets, which are currently sourced from China. Due to recent Chinese restrictions on the overseas sale of these magnets, Tesla is seeking an exemption or alternative suppliers. They have not yet looked into modifying the shoulder actuator but will likely do so if they cannot obtain the necessary materials.

Batteries

Batteries are another item that Tesla’s teams have been working on behind the scenes for years now. The second generation of the 4680 - the Cybercell - has been IRA-compliant for some time now. This means that the Cybertruck is eligible for the US Federal EV rebate. 

Tesla also achieved the lowest cost-per-kWh of any of its cells with the 4680 battery - and it is potentially one of the cheapest cells being manufactured by any vehicle battery manufacturer at this point. With dry-cathode still being worked on, Tesla may be able to squeeze more optimizations and cost efficiencies from the 4680 cells.

Additionally, Tesla is progressing with its plans for lithium refining and cathode production in the US, both of which are scheduled to commence in 2025. While the company says they’re no longer supply-constrained for non-LFP vehicle batteries, on-shoring production and sourcing critical minerals from nations outside of China will be key.

LFP batteries continue to be supply-constrained, namely for the Tesla Energy division. LFP batteries and their materials are sourced from China. Due to tariffs and limited exports, Tesla can’t obtain enough and is considering potentially building an LFP production facility in North America.

Energy

Tesla’s energy division is still experiencing some of the highest growth of any of its divisions. Year over year, Tesla saw a 154% increase in energy storage deployments, including both Megapack and Powerwall - for a total of 10.4 GWh deployed in just Q1 2025. While deliveries in energy storage remain volatile due to the nature of Megapack installations, Tesla expects growth to continue rapidly in this segment.

Tesla also deployed 1GWh of Powerwall 3 residential storage this quarter, marking its strongest quarter. Powerwall 3 has received positive feedback from customers, many of whom appreciate its new capabilities with its built-in inverter for solar.

Megapack is continuing to see demand increases, currently highlighted by utility-scale Megapack systems, as well as data centers requiring stable power delivery. Megafactory Shanghai is also online now and producing Megapacks - with an annual production capacity of 20GWh today and up to 40GWh in the future. The site has also produced over 100 Megapacks this quarter, which are all awaiting delivery.

There was a lot of interesting news from Tesla’s Q1 2025 Earnings Call, covering everything from FSD and Robotaxi - to the less glamorous but equally important Megapack and Powerwall.

Tesla Introduces AI-Powered Phone Support for Tesla Insurance, Reducing Wait Times and Cutting Costs

By Karan Singh
Not a Tesla App

Tesla is heavily leaning into artificial intelligence, and its insurance offering is just another example of how it’s improving its product or lowering costs by leveraging AI.

Tesla recently started offering an insurance discount in select states when drivers use FSD for at least 50% of their drives and now it’s introducing an AI to help handle customer claims.

Tesla has developed an in-house voiced AI agent that can assist customers in handling simple support requests for Tesla Insurance.

Although Tesla Insurance is currently available in just 12 U.S. states, its voice AI assistant is accessible via phone across all supported states.

What the AI is Doing

For customers calling in from those states, the new AI agent provides a unique way to address the most common support calls. And it’s not just answering common questions but actually making requested changes to the owner’s account.

Policy Changes

The first key item is that it automates policy changes. Simple policy updates, including adjusting your deductible or coverage limits, are now done via AI. For policyholders who are simply looking to make quick changes and don’t have any questions, this makes the process a lot quicker by not having to wait for a representative. Tesla isn’t eliminating representatives, but this could reduce the number of representatives required or reduce wait times.

Continue Where You Left Off

The second item here, highlighted by Raj Jegannathan from Tesla’s internal IT team, is that Tesla’s AI agent is able to offer summaries of the user’s last interaction with Tesla Insurance. It will summarize your last interaction and provide assistance on that particular topic if you need to continue it. That means that you don’t have to wait for a human to review your file - the AI will kick off right where you left off.

Tesla appears to be focused on improving efficiency and making support more accessible. While actual items like claims are left up to humans due to their inherently complex nature, this helps free up employees to handle more complex items. While there’s no doubt Tesla will continue to develop this AI like they do everything else, we may soon see it take on even more tasks.

More AI

This isn’t the first AI agent that Tesla has demoed - there is now a chat-based AI sales agent available on the front page of Tesla’s website, which is able to answer common questions on Tesla vehicles.

Tesla has also been improving their AI support tool available in the Tesla App is able to provide feedback on common issues and also guide users towards either solving the problem or placing a support request.

Tesla has recently updated this AI to offer personalized support, allowing you to ask questions such as ‘What are my vehicle service alerts?’ or ‘Does my vehicle have a heat pump?’

Tesla’s strategy here is to influence the cost-heavy areas associated with having humans address simple requests and instead leverage AI, which can offer instant answers and reduce support costs.

Roll Out to More States

While this new AI is currently limited to just 12 states, it is likely to follow Tesla Insurance’s expansion. Insurance seems to have been at a bit of a standstill lately. Tesla continues to improve features such as the improvements to Safety Score V2.2, but we haven’t seen Tesla roll out support to new states since it added Minnesota in November of 2022.

Tesla may be looking to lower costs and refine the experience before it expands to additional states.

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