Tesla Shareholders Are Suing the Company — What It Means If You’re an Investor
A shareholder lawsuit recently filed against Tesla (TSLA) continued a run of bad news for the Elon Musk-led electric vehicle (EV) company, though its stock price hasn’t been too badly affected by it.
Read More: Does Tesla Become More Valuable for Investors When Elon Musk Gets Richer?
Learn More: 4 Low-Risk Ways To Build Your Savings in 2025
The class-action suit was filed on Aug. 4, 2025, Reuters reported. In it, shareholders accused Musk and Tesla of securities fraud for concealing dangers involving its self-driving vehicles — which are considered a key growth driver for the company. What could this lawsuit mean for the stock and shareholders?
Also see whether it’s time to sell Tesla stock after one analyst called its valuation “insane.”
Trending Now: Suze Orman’s Secret to a Wealthy Retirement–Have You Made This Money Move?
Self-Driving Test Problems
Shareholders accused Musk and Tesla of “repeatedly overstating the effectiveness of and prospects” for their self-driving technology and in turn “inflating” the stock price and prospects of the company, Reuters noted.
The suit followed Tesla’s self-driving tests in June that produced less-than-stellar results. It also came only days after Tesla was found to be partly liable in the death of a pedestrian who was struck by a Tesla car operating in Autopilot mode in 2019, Investor’s Business Daily reported.
Check Out: Tesla Is Awarding Elon Musk 96 Million Shares of Stock: Here’s How Much It’s Worth
What Does It Mean for Investors?
Despite the lawsuit’s negative headlines, it hasn’t had much impact on Tesla’s stock price. The company’s shares closed at $309.26 on Aug. 4. They fell only slightly the next day to close at $308.72 and then rose to a high of $320.47 on Aug. 6 before finishing the session at $319.91. The stock closed even higher at $339.03 on Aug. 11.
As Investor’s Business Daily noted, some analysts have warned investors against overreacting to negative headlines involving Tesla’s self-driving technology.
“We’ve learned to ignore headlines related to Autopilot reliability,” Piper Sandler analysts wrote in a note to clients. “But the robotaxi rollout has breathed new life into this topic, and we feel compelled to comment on recent media intrigue. This case does not have direct implications for Tesla’s [Full Self-Driving] rollout.”
But Other Problems Loom
While Wall Street shrugs off Tesla’s legal problems, the company faces numerous headaches in other areas — including a stock price that is down more than 11% in 2025 due to a combination of political and business dynamics.
The political dynamic has to do with Musk’s role as head of the Department of Government Efficiency (DOGE). Musk is no longer affiliated with DOGE, but controversy surrounding the organization battered his public image and the Tesla brand.
On the business front, Tesla has suffered from plunging sales in key global markets as it comes up against more competition from other EV makers.
The company is likely to take another hit from a changing regulatory environment under the Trump administration. That includes an end to the $7,500 EV buyer tax credit.
Tesla also stands to lose a major revenue stream in the form of regulatory credits sold to legacy automakers to help them offset their gasoline-powered fleets and avoid fines, according to Zacks Investment Research. Those fines have been eliminated under Trump’s spending bill — meaning Tesla could lose billions of dollars in future revenue tied to the credits.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Tesla Shareholders Are Suing the Company — What It Means If You’re an Investor