Tesla shareholders sue Elon Musk for allegedly hyping up faltering Robotaxi

Tesla shareholders sue Elon Musk for allegedly hyping up faltering Robotaxi

Episode Transcript

(00:02):
Your ultimate authority for daily Elon Musk news.
Exploring the world's biggest ideas with your host Will
Walden. There's something new everyday.
Will Elon Musk's recent lawsuit derail Tesla's robo taxi plans?
So this happened this week afterinvestors filed a major legal

(00:25):
action accusing Musk of exaggerating Tesla's progress on
his robo taxi. Now, the lawsuit alleges that
Musk made misleading statements significantly overstating the
readiness and capabilities of the company's autonomous driving
technology to boost Tesla's stock value.
This is filed on Monday in federal court in San Francisco,
and the lawsuit targets Musk's repeated promises around Tesla's

(00:48):
ability to deploy fully autonomous robo taxis on public
roads. The plaintiffs argue that Musk
knowingly made false claims between 2022 in 2024, promising
investors that robotaxis would begin large scale operation
imminently. They said that these statements
artificially inflated Tesla's stock price, ultimately

(01:09):
misleading shareholders about the true state of Tesla's
autonomous driving progress. Now, central to this controversy
is Musk's bold announcement fromTesla's Investors Day in March
of 2023. During that event, Musk declared
that Tesla would achieve full autonomy and release thousands
of robo taxis out of the streetswithin a year.

(01:31):
Investors allege that Musk had no factual basis for these
assertions and ignored internal assessments from Tesla's
engineers, who warned him about technical delays and operational
issues. Now, the lawsuit seeks
unspecified financial damages and demands that test the reform
its corporate governance to prevent future misleading claims

(01:51):
from company executives. Now, Tesla's robo taxi program
has faced ongoing skepticism allover the place.
For years, regulators in the US and Europe have consistently
expressed caution, emphasizing safety concerns and requiring
extensive testing before permitting fully autonomous
vehicles on public roads. Multiple analysts also expressed

(02:13):
reservations about Musk's ambitious timelines, his crazy
timelines, suggesting that technological and regulatory
barriers remain far greater thanTesla publicly acknowledged or
Elon Musk has even talked about now.
Despite these hurdles, though, Musk consistently doubled down
on aggressive timelines. Throughout 2023, he repeatedly

(02:35):
used Tesla's public events and quarterly earnings calls to
announce rapid robotaxi deployment.
Musk's optimistic forecast significantly influenced
investor expectations and sentiment, driving Tesla's
market value through the roof. During periods following these
announcements, internal documents referenced in the
lawsuit repeatedly reportedly reveal concerns from Tesla

(02:59):
engineers dating way back to 2022.
And according to these documents, engineers warned Musk
directly about major obstacles, including software sensor
performance limitations and alsosafety shortcomings.
Now, these internal warnings stand in sharp contradiction to
Musk's optimistic public forecasts.

(03:20):
And this is the central basis ofthe investor's claims of
deliberate deception by Elon Musk.
Now, Tesla has not publicly responded, of course, to these
claims. However, the company previously
acknowledged difficulties in developing fully autonomous
tech. In regulatory filings in late
2024, Tesla cautioned investors about uncertainties and

(03:44):
potential delays relating to autonomous vehicles.
Now, this legal action now raises questions about whether
Tesla adequately disclosed the state of its autonomous driving
development to shareholders in atimely manner and also
transparently. Now, the Ribotaxi sector holds
enormous financial potential forTesla.

(04:07):
There's estimates that a successful robo taxi roll out
could add billions to Tesla's revenue streams by enabling the
company to capture recurring income from ride hailing
services. This is going to put Uber out of
business if Uber doesn't step uptheir game because Tesla owns
everything. Vertical integration.

(04:28):
They make the cars, they make the software, they take the
money from you when you get in the cyber taxi, it's all there
and it pays statements. Elon Musk described robotaxis as
integral to Tesla's long term profitability, positioning
autonomous driving as a core pillar of the company's future

(04:49):
business model. That and robots now.
Tesla stock recently has been upand down, closely tied to Musk's
public statements and future promises.
Optimistic announcements around autonomous driving technologies
historically contributed to verylarge short term gains and

(05:11):
Tesla's value. The direct connection between
Musk's public claims and Tesla'sstock price forms a cornerstone
of the current legal challenge, alleging purposeful exaggeration
designed to artificially boost market confidence.
This lawsuit isn't without problems, though.
This includes proving deliberateintent to mislead investors

(05:35):
rather than typical business optimism.
Courts traditionally grant considerable leeway to
executives making forward-looking statements about
product development and also technological advancements.
Nevertheless, if plaintiffs successfully prove Musk knew
about internal warnings contradicting his public
declarations, this could establish the necessary legal

(05:58):
basis for holding Tesla accountable for misleading these
investors, and they could get hundreds of millions of dollars
in payouts. Now, Tesla investors in the
broader market are looking out for this.
I'm looking out for this. I want this to be figured out.

(06:18):
Elon Musk has sky high optimism at all times.
So I was a reporter on the side of Hwy. 4 for Starship down at
star base Texas for SpaceX for awhile for about a year.
And the reason why I literally moved from where I was, I was

(06:39):
happy where I was. I moved to Texas was because of
Elon Musk's optimism. I uprooted my life, moved away
from my family, my my dad and mysister and brother and all my
friends in order to pursue this Starship launch fantasy that
Elon Musk told everybody about. There was going to be a launch

(07:03):
of ship four and chip 20 and booster 4 from Starbase sometime
within the year. Now, me being an optimist
myself, I thought there was no way they couldn't do this.
There were of course regulatory things that happened.

(07:24):
They shut it down basically the you know, they shut down the
whole operation there for launching because there were
environmental concerns for took him.
I think it was about 7. Months before.
They can actually do anything. So I was there for almost a year

(07:46):
on the side of the road documenting this and hoping
every day that the final piece of the puzzle would be in place
so I could be there to witness the first launch.
Now after a year ish and after Elon Musk continued to hype this
up for me, I couldn't handle Texas anymore for my personal,

(08:10):
you know, personal reasons. I wasn't happy there.
Not anything against Texas or against the people there because
the people were fine people, good people, really nice
actually. And I had a great time filming.
It was just, I was too far away from my family.
I'm a Family Guy. I, I want to be near people that
I love. So I was all alone basically.

(08:31):
And I decided to take a leave and get out of there 'cause
like, you don't really know what's going to go on.
Elon's optimistic, but like you can't figure out what's going to
go on with the federal government.
You have no idea when these, youknow, federal agencies are going
to come together and figure out this problem.

(08:52):
And it literally took them almost a year to do that.
So for me, I had I had enough and I was out of there.
But it I went there because of Elon.
I went there because I was really set on watching this
first launch. And the first rocket was never
really intended to launch. They were putting it together to

(09:14):
figure out systems. Yeah, this is we found this out
later. And for me, just like these
investors, I feel a little bit of betrayal here.
I was told by Elon and numerous times as we all were, that this
thing was going to fly. He was hinting at it since day

(09:37):
one, telling everybody that thisis the one, we're going to get
this thing up, we're going to launch it from Tower 1.
So I understand, I feel it, but I mean, I mine wasn't is
financially, you know, I'm not going to get a financial gain
from saying anything about this about Elon, not hundreds of
millions of dollars unless somebody wants to just be really

(09:58):
nice and send me a bunch of money.
That would. Be great, but I can understand
where they're coming from. So let me know in the comments
of whatever podcast platform you're on right now or whatever
platform you're on right now, what do you think of this?
Do you think Elon has the right to say whatever he wants about?
Future. Optimism and you know,

(10:21):
technological promises for Tesla.
Can he just say whatever he wants I and mislead investors?
Do you think it's misleading? Let me know in whatever comments
and whatever platform you're on right now.
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(11:05):
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(11:49):
Thank you so much.