Tesla and Elon Musk sued by shareholders over Autopilot safety risks after a $38 billion drop in market value, report says

• Tesla shareholders are suing the EV maker and its CEO Elon Musk over its claimed self-driving capabilities.
• Plaintiffs say the company concealed the potential for its self-driving tech to cause "serious risk of accident and injury."

Elon Musk and Tesla were sued by shareholders Monday over alleged falsehoods in the company's claims about self-driving capabilities that they argued hurt shareholder value, a report says.

According to filings seen by Reuters, investors led by Thomas Lamontagne accuse the EV maker of a four-year process of defrauding shareholders by misleading them over the potential for the firm's self-driving technology to create a "serious risk of accident and injury."

Tesla's self-driving technology is suspected to be the cause of several high-profile accidents, which have forced recalls by regulators.

On February 16, Tesla was forced by the National Highway Traffic Safety Administration (NHTSA) to recall 362,000 of its vehicles over concerns its FSD software may cause it to act "unsafe" at intersections. That coincided with a 5.7% drop in its stock price, equivalent to a $38.6 billion drop in market value for the company.

According to Reuters, shareholders argued that the drop in stocks was one of several instances where shareholder value was harmed by the company's self-driving claims.

"As a result of defendants' wrongful acts and omissions, and the precipitous decline in the market value of the Company's common stock, plaintiff and other class members have suffered significant losses and damages," the complaint said, per Reuters.

This isn't the first lawsuit Musk has faced over the company's ambitious self-driving technology, having been sued by drivers in September over similar falsehood claims linked to 2016 advertising that promised FSD was "just around the corner."

Tesla disagrees that it has committed fraud, arguing that its lofty goals simply haven't found success yet.

"Mere failure to realize a long-term, aspirational goal is not fraud," lawyers for Tesla wrote in a November filing, as reported by CNN.

Scrutiny has grown on self-driving technology in recent months, with Tesla's own cofounder Martin Eberhard calling it "crap."

Tesla didn't immediately respond to Insider's request for comment.