Dive Brief:

• Tesla, its CEO Elon Musk, CFO Vaibhav Taneja, and former CFO Zachary Kirkhorn concealed “significant risk” related to the electric vehicle maker’s autonomous driving technology, making materially false and misleading statements about the technology’s safety and potential, according to a federal securities class action complaint filed Monday in the United States District Court for the Western District of Texas.  
• The complaint, which names the three current and former company executives as defendants, was filed by Denise Morand on behalf of company stockholders which purchased shares between April 19, 2023 and June 22, 2025. It alleges the named defendants committed securities fraud by failing to disclose the risks associated with the EV maker’s autonomous vehicle technology, including robotaxis, and that, “accordingly, Tesla’s business and/or financial prospects were overstated,” the complaint reads. “As a result, the Company’s public statements were materially false and misleading at all relevant times.”
• By failing to disclose such risks, the three defendants participated in a scheme to “deceive the investing public” and “artificially inflate and maintain the market price of Tesla securities. Specifically, the complaint alleges “defendants Kirkhorn and Taneja enriched themselves by engaging in insider sales of the shares while those shares traded at artificially high prices.” During the period in question, Kirkhorn sold approximately 7,403 shares of Tesla stock with a value of at least $1.59 million, while Taneja sold about 8,192 shares of Tesla stock for at least $2.51 million, according to the complaint.

Dive Insight:

Both Kirkhorn and Taneja have reaped multi-million dollar pay packages during their respective tenures as finance chief for the Austin, Texas-based EV maker.  Kirkhorn departed from the EV maker in 2023 with a $590 million pay package, after a 13-year tenure with Tesla that included four years in its top financial seat, CFO Dive reported at the time.

Taneja, meanwhile, who succeeded Kirkhorn as CFO in 2023, has made repeated sales of company stock over the past year, most recently offloading approximately $1.7 million in shares across transactions on July 7 and 8 after selling more than $3 million in shares in June, CFO Dive reported. This came after Taneja’s compensation for full-year 2024 reached $139 million, largely comprised of stock and equity awards.

The complaint comes as the EV maker’s efforts to move forward with autonomous driving technology have hit repeated setbacks. On Aug. 1, the EV maker was ordered to pay more than $240 million to the victims of a 2019 crash related to its autopilot technology by a Florida jury, according to a report by The Guardian. The company also remains embroiled in a regulatory tug-of-war with the California Department of Motor Vehicles, which has claimed the EV maker exaggerated the capabilities of its self-driving technology, according to a July 21 report by Bloomberg.

Musk has repeatedly championed the potential of Tesla’s robotaxi and similar technologies, a long-time passion project for the EV maker’s CEO. During the company’s most recent earnings call — where Tesla saw a 12% dip in revenue year-over-year, as well as 42% YoY dip in operating income — Musk was optimistic about Tesla’s robotaxi prospects, despite warning there might be some “rough quarters” ahead for the business, CFO Dive previously reported.The company’s robotaxi pilot, launched in Austin, Texas in June, is a “seminal point” for the business, he said, while also stressing the company is “being paranoid about safety.”

Monday’s shareholder complaint alleges Musk and his fellow defendants made repeated false or repeated statements regarding the safety of its autonomous driving services, and pointed to a June Bloomberg article, published shortly after the launch of the robotaxi pilot, which appears to show robotaxis disobeying traffic laws. The defendants also failed to disclose risks that such vehicles would “operate dangerously and/or in violation of traffic laws,” as well as the corresponding likelihood that Telsa would become “subject to heightened regulatory scrutiny.”

“It’s never actually investors. It’s always shitty class-action lawyers grifting for their percentage of the verdict,” Musk said in a Tuesday post on the social media site X, which he owns, in a reply regarding the suit. “They are scum of the Earth. The worst human being I’ve ever encountered.”

The suit comes as Tesla’s board also voted to grant Musk a pay package with a value of approximately $29 billion, following a seven-year ongoing regulatory tussle with Delaware legislators.

“To recognize what Elon has accomplished and the extraordinary value he delivered to Tesla and our shareholders, we believe we must take action to honor the bargain that was struck in 2018,” the company said in a Monday post on X. The board “recommended this award as a first step, ‘good faith’ payment to Elon,” according to the post.

Tesla did not respond to requests for comment. Willie C. Briscoe, attorney with the Briscoe law firm representing Morand, did not respond to requests for comment.