• Elon Musk and Tesla are facing a shareholder lawsuit alleging securities fraud.
• The lawsuit claims Tesla endangered investors by downplaying risks associated with its Robotaxi service.
• Tesla's stock price fell 6.1% following the public test of their robotaxis.
• Musk has criticized the lawsuit on social media, calling the lawyers involved "scum of the Earth."
• The lawsuit seeks unspecified damages for shares held between April 19, 2023 and June 22, 2025.

Elon Musk and Tesla are embroiled in a proposed class action lawsuit filed by shareholders in Austin, Texas, accusing them of securities fraud. The lawsuit alleges that Tesla failed to disclose significant safety risks associated with its self-driving vehicles, including the Robotaxi. This claim follows Tesla's initial test of its robotaxi service in late June, during which the vehicles displayed dangerous behavior such as speeding and erratic braking, as well as operating incorrectly in traffic. Tesla's stock subsequently dropped 6.1%, wiping out roughly $68 billion in market value, according to Reuters and Business Insider.

The lawsuit highlights a failure by Tesla to adequately inform investors about the dangers related to its autonomous driving technology. Allegations include Musk's assurance during an April conference call that the company was "laser-focused" on launching the Robotaxi service, despite evidence from the test suggesting potential safety violations. Furthermore, prominent incidents, such as a Florida jury finding Tesla partially responsible for a deadly crash linked to its self-driving technology, have raised concerns about the company's marketing practices, as reported by Reuters, India Times, and India Times.

In response to the lawsuit, Musk took to social media, characterizing the lawsuit as a maneuver by opportunistic "class-action lawyers" rather than genuine investors. He expressed disdain for the legal action, calling the lawyers "the worst" and suggesting that they exploit such cases for financial gain. Musk emphasized that investor confidence remains vital for Tesla's vehicle rollout and future ambitions, particularly as the company plans to expand its Robotaxi operations across various states, contingent on regulatory approval, according to India Times and Business Insider.