Tesla Faces Fresh Class Action Lawsuit Over Self-Driving and Autopilot Claims
Tesla, a company that has long been at the forefront of electric vehicle (EV) innovation, is once again under legal fire. This time, the automaker is facing a fresh class-action lawsuit in Australia, challenging its claims about the performance of its self-driving and Autopilot systems, along with the capability of its “Hardware 3” (HW3) computer.
With Tesla already battling numerous lawsuits related to its self-driving claims, accidents involving its advanced driver-assist systems, and alleged fiduciary breaches by CEO Elon Musk and board members, this new legal action only adds to its growing legal troubles.
The class-action lawsuit, filed in the Federal Court of Australia, has been organized by law firms Woodsford and JGA Saddler. The case targets Tesla Motors Australia Pty Ltd (Tesla Australia) and its parent company, Tesla, Inc. (Tesla US). The plaintiffs allege that Tesla Australia marketed and sold vehicles that were defective, misleading consumers about their capabilities.
The firms are currently seeking individuals who purchased or leased a Tesla Model 3 or Model Y in Australia between May 2021 and February 2025 to join the lawsuit.
The Three Big Allegations
The lawsuit revolves around three major issues that Tesla owners have reportedly faced:
1. Phantom Braking Issues
One of the biggest concerns raised in the lawsuit is the phenomenon of “phantom braking.” This occurs when Tesla’s Full Self-Driving (FSD) and Autopilot systems suddenly engage automatic emergency braking inappropriately. Instead of reacting to an actual obstacle, the system allegedly applies the brakes abruptly, potentially increasing the risk of collisions.
Tesla owners worldwide have reported this issue, with some saying their vehicles slam on the brakes unexpectedly even when no obstacle is present. The lawsuit argues that this flaw makes driving more dangerous rather than safer.
2. Range Discrepancies
Another focus of the lawsuit is the difference between Tesla’s advertised driving range and the actual real-world performance of its vehicles. According to the claim, Tesla cars often fail to achieve their maximum advertised range, particularly when the battery level is above 50%.
This isn’t the first time Tesla has been accused of inflating range estimates. While the company has built a reputation for industry-leading range, real-world testing has often revealed that its vehicles fall short of the promised figures.
3. False Self-Driving Hardware Claims
The lawsuit also challenges Tesla’s long-standing claim that all of its vehicles manufactured since 2016 have the hardware required for full self-driving capabilities.
Despite these assurances, Elon Musk recently admitted that the Hardware 3 (HW3) self-driving computer is not capable of achieving unsupervised self-driving. This revelation has sparked frustration among Tesla owners who believed their vehicles would eventually receive software updates enabling full autonomy. The plaintiffs argue that this misrepresentation has negatively impacted the resale value of their vehicles.
This lawsuit comes at a challenging time for Tesla in Australia. The company has been struggling with declining sales, with a 17% drop in 2024 and a further 33% decline in the first month of 2025. These legal battles could further damage Tesla’s reputation in the region and beyond.
Moreover, now that Musk has admitted HW3 cannot support full autonomy, the lawsuit could set a precedent for similar legal actions in other countries. Tesla previously assured customers that their vehicles were “future-proof,” but now, many owners feel misled.
Elon Musk has suggested that Tesla will offer retrofits for customers who purchased the Full Self-Driving (FSD) package, potentially upgrading them to a more capable system. While this may appease some customers, it remains to be seen whether it will hold up in court.
Tesla’s claim that “all cars produced since 2016 have the hardware capable of self-driving” played a major role in boosting sales. Many buyers purchased their vehicles under the assumption that they would retain higher resale values because of these future capabilities. Now that these promises appear unfulfilled, Tesla could face significant financial consequences.
The outcome of this lawsuit could have wide-reaching implications for Tesla and the broader EV industry. If the courts rule in favor of the plaintiffs, Tesla may be required to compensate every customer who bought an affected vehicle.
As more lawsuits related to HW3 and other issues emerge, Tesla will need to address these concerns transparently and take action to regain consumer trust. The coming months will be crucial in determining how Tesla navigates these legal challenges while maintaining its position as a leader in the EV market.
This lawsuit is just the latest chapter in Tesla’s ongoing battle over self-driving claims. Whether Tesla can weather the storm and emerge stronger remains to be seen. For now, all eyes are on the legal proceedings in Australia and how they might shape the future of Tesla’s autonomous driving ambitions.
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