Tesla: Full Self-Driving Not Launching Is a ‘Failure’ But Not a Fraud

Tesla hasn’t met its goal of a fully self-driving car, but it says failing to meet that goal isn’t the same as fraud.

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Tesla: Full Self-Driving Not Launching Is a ‘Failure’ But Not a Fraud © Tesla: Full Self-Driving Not Launching Is a ‘Failure’ But Not a Fraud

Back in September, a Tesla customer filed a lawsuit against the electric automaker, claiming that it defrauded customers by overstating the capabilities and timeline of its Full Self-Driving software. Tesla has denied these claims in court, and has recently filed a motion to dismiss the lawsuit against it under the grounds that a failure to meet its long-term goals wasn't fraud—just a failure.

The lawsuit alleges that Tesla has drug its feet launching its Full Self-Driving suite with its promised capabilities, all the while the automaker's CEO, Elon Musk, has touted that the software's capabilities (along with its full launch) were right around the corner. Still, thousands of Tesla buyers opted to purchase Full Self-Driving with the belief that their vehicle would eventually have the capability.

“Mere failure to realize a long-term, aspirational goal is not fraud,” wrote Tesla in its motion to dismiss the lawsuit against it.

Musk has repeatedly promised the world that the company would have Level 5-capable vehicles—or at least vehicles with the hardware capable of the eventual software—since 2016 and even earlier. Similar promises of the software's capability and release have been promised since, including the promise to unleash a million robotaxis on the world by the end of 2020.

Additionally, the CEO originally promised that a Tesla would complete a coast-to-coast autonomous drive in 2017, and then again in 2018. Musk also predicted in 2016 that a vehicle could be autonomously summoned across the country within two years. In 2021, alleged former Tesla employees reportedly revealed that Tesla's 2016 "hands-free" drive of a Tesla Model S was fabricated by shooting it over multiple takes, and the vehicle's failures (including the Model S crashing into a fence) were removed from the final cut. And recently, Musk promised during this year's second quarterly earnings call that it would "solve" its Full Self-Driving software by the end of the year.

In order for the lawsuit against Tesla to have any teeth, the plaintiffs must prove that Tesla intentionally misled its buyers on the timeline and capabilities of its software. However, this isn't the first lawsuit against Tesla over its Autopilot software stack, nor is it the first time Tesla was challenged over the capabilities of its systems. In 2020, Tesla was sued over the alleged misrepresentation of Autopilot's capabilities. The lawsuit is still ongoing.

Likewise, the California Department of Motor Vehicles recently filed two complaints with the state's Office of Administrative Hearings over—again—alleged misrepresentation of Autopilot and Full Self-Driving's capabilities. In the DMV's complaint, it alleges that Tesla's branding of its driver assistance features, as well as some marketing material on its website, does not fit the actual capabilities of the vehicle at the time of sale.

A snapshot of Tesla's website showing marketing descriptions of Autopilot and FSD

A newly passed California bill has also targeted Autopilot and FSD by name to prevent "autonowashing," or the misrepresentation of a vehicle's driver assistance capabilities based on "language that implies or would otherwise lead a reasonable person to believe that [a] feature allows [a] vehicle to function as an autonomous vehicle," when it does not have the capability.

Now, while this lawsuit has the burden to prove that Tesla knowingly defrauded its customers, it certainly touches on a door that many Tesla buyers have already wondered: what happens if they never get their money's worth? Whether Tesla is found to be liable will ultimately be up to the courts, although regulators have already begun cracking down on verbiage used by Tesla and other automakers to describe its driver assistance features in the name of consumer protection and road safety.

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