Judge Clears Way for Tesla Class Action Over Alleged Exaggerated FSD Claims

Case Overview: A federal judge has allowed a class action lawsuit to move forward against Tesla and its CEO Elon Musk, over claims that the company made exaggerated promises about its "Full Self-Driving" system's capabilities.

Consumers Affected: California drivers who purchased Full Self-Driving (FSD) between 2016 and 2024 and opted out of Tesla’s arbitration agreements.

Court: U.S. District Court for the Northern District of California

Tesla must face long-standing claims that it lied about its “Full Self-Driving” (FSD) system, leading drivers to believe it was far more advanced than it actually was. 

A federal judge in San Francisco has allowed a class action lawsuit to move forward, opening the door for California drivers to sue the electric carmaker and its CEO Elon Musk over what they allege were exaggerated promises about self-driving technology dating back to 2016.

At the center of the case are accusations that Tesla overstated both the hardware and software capabilities of its vehicles, leaving customers paying thousands of dollars for FSD packages that fell far short of true autonomy. 

Judge Rita Lin ruled that the common question of whether Tesla’s vehicles ever had the necessary sensors or proven ability for full autonomy justified grouping drivers into a class action.

What Exactly Is FSD?

FSD, or Full Self-Driving, is Tesla’s advanced driver-assistance package, marketed as a step toward fully autonomous vehicles. Since 2016, Musk has repeatedly claimed that Tesla cars were equipped with all the hardware needed to eventually achieve “Level 5” autonomy, the highest standard where a car can drive itself in any conditions.

But reality has been slower to catch up. Even with the latest updates, Tesla’s FSD is considered closer to Level 3 or 4, meaning it still requires human oversight and occasional intervention. In the mid-2010s, Tesla’s vehicles were equipped with older cameras and onboard computers that experts say were nowhere near capable of delivering the futuristic vision Musk described.

Ruling Justifies Class Action for Affected Drivers

Judge Lin pointed to Tesla’s repeated statements on its website, in blog posts, quarterly earnings calls, and press events that its cars had the necessary hardware for self-driving. 

While these kinds of claims might not normally be enough to establish widespread exposure, Lin noted Tesla’s unusual marketing strategy, which relies heavily on Musk’s public image and direct communication with customers, rather than traditional advertising.

The lawsuit covers California drivers who purchased FSD between 2016 and 2024 and who opted out of Tesla’s arbitration agreements. While that group is limited in size, it represents a significant cohort of long-term buyers who say they paid extra for technology that never lived up to its billing.

Tesla Faces Growing Legal Pressures

This lawsuit adds to a growing list of legal challenges confronting Tesla. A Florida jury recently found the company partially liable in a fatal 2019 Autopilot crash, awarding $243 million in damages. In California, regulators are weighing whether Tesla misled buyers about FSD in a case that could temporarily suspend its ability to sell cars in its largest U.S. market.

Investors have also filed a lawsuit, accusing the company of fraud over safety concerns tied to its Robotaxi launch in Austin. Meanwhile, another case claims Tesla secretly tracked website visitors’ personal data and shared it with third parties without consent.

Case Details

• Lawsuit: In re Tesla Advanced Driver Assistance Systems Litigation
• Case Number: 22-05240
• Court: U.S. District Court for the Northern District of California

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