Elon Musk and Tesla promote self-driving technology, but when accidents happen, they blame customers.

For nearly a decade, Elon Musk has painted an ambitious picture of the future of the auto industry. But recently, a series of lawsuits have taken place, with both judges and juries criticizing Tesla for promoting advanced full self-driving technology to sell cars but then denying responsibility when things went wrong.

Sued

In the fall of 2016, Elon Musk shocked the auto industry when he announced that every Tesla from that point on would be equipped with enough hardware to achieve “level 5” autonomy — the highest level, where the car can operate completely independently in all conditions.

In Musk’s vision, the world will be filled with robotaxis, and car owners will be able to let their Teslas drive while they sleep, earning tens of thousands of dollars a year. It’s not just a technological promise, but also a bold marketing campaign that cements Tesla’s image as a pioneer of the self-driving era.

Nine years later, that vision has yet to materialize. Today’s Teslas are still only rated at “level 2” — assisted driving that requires the driver to keep their hands on the wheel and ready to take control at all times.

The Austin test robotaxi still requires a safety driver in the front seat and a remote control team to intervene in difficult situations. Meanwhile, Alphabet’s Waymo has been operating commercial robotaxi services in several major cities, becoming a living testament to a promise that Tesla has yet to deliver.

“There are real robot taxis that are driving real people on real roads right now, but none of them are Teslas,” said Bryant Walker Smith, a self-driving car researcher and professor at the University of South Carolina.

In July 2025, Mr. Smith testified as an expert witness for the California Department of Transportation (DMV) in its lawsuit against Tesla.

This apparent discrepancy between advertising and reality has been at the heart of a series of problems.

Now, those claims are at the heart of a series of lawsuits. In San Francisco, a federal judge has allowed a class-action lawsuit against Tesla, alleging that Musk and the company have been exaggerating the self-driving capabilities of their electric vehicles since 2016.

This is a massive class action lawsuit being filed on behalf of thousands of people who purchased the “Full Self-Driving” (FSD) package on the basis of the promise of full self-driving. FSD owners have opted out of Tesla’s arbitration agreement from 2017 through mid-2024.

“Innocent people have paid with their lives for Elon Musk’s lies about Tesla’s self-driving software,” said Dan O’Dowd, a longtime critic of Elon Musk’s self-driving claims.

At the same time, the DMV is seeking to suspend Tesla’s license to sell cars in the state, alleging the company has misled consumers. These moves show that Tesla’s problems have gone beyond individual complaints and have become a full-blown confrontation with the entire legal system.

In Florida, a jury ordered Tesla to pay $243 million in damages over a fatal 2019 crash that involved a person with Autopilot engaged. And in California, the Department of Motor Vehicles (DMV) is seeking to suspend Tesla’s right to sell vehicles in the state because of misleading advertising.

During the trials, Tesla’s lawyers sought to defend Musk’s statements by arguing that they were merely “puffery”—exaggerated statements that should not be taken literally.

But this defense is difficult to hold in the auto industry, where safety is paramount, and faces strong opposition from juries and judges.

One recent ruling, which ordered Tesla to pay hundreds of millions of dollars in damages in a fatal crash where its Autopilot system was allegedly involved, is a clear sign that courts are no longer buying Tesla’s argument.

Judges and juries in recent lawsuits have pointed out a contradiction: Tesla sells its cars as “full self-driving” while denying responsibility when accidents occur, saying it is only driver assistance technology.

“Tesla wants to do everything, they want to sell cars by telling people they can drive on Autopilot and Full Self-Driving, but then when someone dies, they want to say it was all driver error and Tesla just claims the car is driver assistance technology,” said Missy Cummings, a George Mason University professor and AI expert who has advised the NHTSA on autonomous vehicles.

The Price of Ambition

These legal troubles are not only a financial burden, but also a serious blow to Tesla’s reputation. With electric vehicle sales slowing, Tesla needs to prove itself as a real technology company to maintain its leadership position.

However, while rivals like Alphabet’s Waymo have rolled out commercial robotaxi services in many cities, Tesla is still struggling with initial testing and safety concerns.

While the financial impact of the lawsuits is not yet enough to threaten Tesla’s existence, the reputational consequences are clear.

Tesla’s electric vehicle sales fell 13% globally in the first half of 2025. Used Tesla vehicle values ​​have also fallen the most among major brands. For investors, Tesla’s stock has lost 20% since the beginning of the year, partly reflecting doubts about Musk’s self-driving strategy.

Elon Musk has been criticized many times for making overly optimistic predictions — from the Hyperloop to solar panels.

But this time, the broken “promises” of self-driving not only disappointed him, but also dragged him into a legal spiral, opening up the risk of facing huge compensation and closer supervision from regulators.

This reality is creating a paradox: while Tesla wants to be seen as a pioneer in self-driving technology, legal systems are increasingly forcing it to acknowledge the technology’s limitations. Musk’s confident statements, once a driving force for innovation, are now becoming a legal burden.

Back in California, the DMV’s lawsuit is based on Tesla’s claim on its website that the vehicles are “designed to be able to make long and short trips without the driver having to take any action.”

Tesla countered that these statements were protected by the First Amendment right to free speech, and that warnings about drivers needing to pay attention were sufficient to refute the misleading claims.

Tesla has still had to update the description on its website for the FSD package, though. The new description clarifies that the system “requires active driver supervision and does not make the vehicle autonomous.”

The change comes after Tesla’s board proposed a $1 trillion compensation package for Elon Musk, one of the conditions of which is to get 10 million FSD registrations and 1 million robotaxis on the road.

The act of changing the description could be seen as an attempt to mitigate future legal risk, but also as indirect evidence that their previous statements may have been misleading.

The story of Tesla and self-driving technology is a reminder that in the world of technology, big promises come with big responsibilities. When the gap between words and actions becomes too wide, the consequences are not only disappointment but also costly lawsuits and a loss of public trust.

In its latest monthly price report, car-buying site iSeeCars noted that used Teslas lost the most brand value this year, falling 5.3% in July 2025.

Perhaps, the story Tesla is going through is a valuable lesson about the boundary between vision and illusion, between bold marketing and liability. For Elon Musk, the journey to turn the “self-driving car dream” into reality is now not only a matter of technology, but also a battle to regain lost trust.