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Tesla FSD’s prolonged release doesn’t make it a ‘fraud,’ company says
Tesla Full Self-Driving’s prolonged release doesn’t make it a “fraud,” the company said in a motion to dismiss a case.
Tesla is currently involved in a class-action lawsuit from a few Autopilot and Full Self-Driving customers and has recently filed a motion to dismiss the case with the U.S. District Court in San Francisco. In that motion, a statement was made by Tesla’s attorneys that may have been taken out of context by some media reports.
Teslarati obtained a copy of the motion, and here is what we found.
After some background information on FSD, Tesla noted that each of the plaintiffs purchased a vehicle, and “all but one allegedly purchase the FSDC package.” (FSDC is an acronym for full self-driving capability.)
“Plaintiffs knew at the time of purchase that their cars were not completely autonomous. And they knew that the timeline towards more complete autonomy was contingent upon numerous factors, including software development and regulatory approval. Yet now they sue Tesla, complaining that their cars are not completely autonomous.”
The document noted that four out of five of the named plaintiffs have valid arbitration agreements with Tesla that should be enforced and cover all of their claims. The one plaintiff who opted out “advanced a consolidated complaint riddled with defects, and that should be dismissed.”
The plaintiff “sued too late–five years after he purchased his vehicle and the optional software package, well after any of his claims accrued. All of his claims are time-barred and should be dismissed. Moreover, the hundreds-of-paragraph, narrative complaint fails to support a single cognizable legal theory. The Complaint makes no mention of the parties’ written contract or Tesla’s car warranty. It instead cherry-picks numerous statements allegedly made by Tesla and attempts to manufacture claims for fraud and breach of warranty.”
Tesla’s attorneys made several statements, including that headline-worthy one regarding FSD and failure. However, the attorneys never claimed that FSD is a failure. In the document, the attorneys pointed out that the complaint “identifies no statement that Tesla made that was fraudulent.”
Additionally, it added that no there was no statement made that Tesla’s vehicles, including those equipped with the FSDC package, were fully autonomous at the time of the Plaintiff’s purchase. Tesla’s website also made it very clear that those vehicles were not.
Tesla’s attorneys noted that the plaintiff allegedly researched Tesla’s online and public statements and reviewed them before buying his vehicles. The labels of “Autopilot,” “Enhanced Autopilot,” or “Full Self-Driving Capability” didn’t mean that the vehicles were fully autonomous. Tesla’s attorneys also noted that Tesla’s user manuals plainly showed this as well.
“Nor would any reasonable consumer purchase a Tesla vehicle with the belief that it is fully autonomous based solely on these labels,” the attorneys said.
Instead, each of the plaintiffs alleged that they “decided to purchase [his or her] vehicle and the ADAS packages after researching, reviewing, and relying on Tesla’s online and other public statements.”
The plaintiff’s “assertion that Tesla promised the vehicles were already fully autonomous when they were sold rings hollow,” the attorneys stated.
“His assertion that Tesla promised to release completely autonomous capabilities ‘within a reasonable time after,’ his purchase fares no better.”
“No allegations show that Tesla promised that the FSDC package would enable full autonomy within a specified period of time. Many of the statements quoted in the Complaint did not even concern the FSDC package,” the attorneys said, adding that this makes it irrelevant to the plaintiff’s claims.
“In addition, the quoted statements were also often accompanied by and subject to the qualifier that a release of fully autonomous capabilities to the general public would require government approval, a variable over which Tesla had no control, and that any regulatory clearance would require a vast amount of data to show that completely autonomous driving is significantly safer than human driving.”
The attorneys cited another federal court that said similar statements “do not constitute fraud” because they indicate that Tesla wasn’t making the absolute representation the Plaintiff said he was.
“Same here. Especially under the heightened Rule 9(b) standard, no allegation suggests that the aspirational statements that Tesla did make were, somehow, false when made. See Richardson, 2000 WL.”
“To the contrary, allegations in the Complaint demonstrate that Tesla has been constantly improving its ADAS technology by releasing software updates, with a goal of achieving more and better autonomy capabilities in the future.”
“Mere failure to realize a long-term, aspirational goal is not fraud.“
In reference to the above statement, the attorneys pointed out that the courts often rejected the argument that a plaintiff can prove the fraudulent intent by pointing to Tesla’s “subsequent failure to perform under the agreement.”
Since launching the software in 2015, Tesla has made a lot of progress toward FSD and autonomous. Tesla has had two AI Day events explaining the technology being developed and used. And Tesla has since launched an FSD Beta testing program, and you can read the recent Tesla FSD Beta news here.
Disclosure: Johnna is a $TSLA shareholder and believes in Tesla’s mission.
Your feedback is welcome. If you have any comments or concerns or see a typo, you can email me at johnna@teslarati.com. You can also reach me on Twitter at @JohnnaCrider1.
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News
Tesla counters Norway’s VAT hike with dedicated consumer bonus
The move follows Tesla Norway’s stunning finish in 2025, where the company saw substantial sales during the final weeks of the year.
Tesla has rolled out a price incentive in Norway, effectively offsetting a notable VAT increase that hit electric vehicle buyers at the start of 2026.
The move follows Tesla Norway’s stunning finish in 2025, where the company saw substantial sales during the final weeks of the year.
A “Tesla bonus”
Once the VAT increase kicked in at the start of 2026, Tesla Norway’s sales cooled almost immediately, as noted in a CarUp report. Tesla’s response was swift, with the electric vehicle maker rolling out what it calls a “Tesla bonus.”
This bonus effectively cuts prices by up to 50,000 kronor across eight model variants. All versions of the Tesla Model Y qualify for the incentive, along with most Tesla Model 3 trims, save for the base entry-level model.
This means that for Tesla Norway’s best-selling vehicles, the bonus effectively restores pricing to pre-VAT levels. This blunts the impact of the new tax and makes Tesla’s vehicle offerings competitive again in Europe’s most EV-saturated market.
Stabilizing demand
In addition to the “Tesla bonus,” the electric car maker is also offering a promotional interest rate for up to three years, with terms varying by model. The incentive applies to orders placed between January 9 and March 31, 2026, with delivery required by the end of the first quarter.
The stakes are high in Norway, where electric vehicles dominate new-car registrations. From the vehicles that were sold in 2025, 96% of new cars sold were fully electric. And from this number, Tesla and its Model Y made their dominance felt. This was highlighted by Geir Inge Stokke, director of OFV, who noted that Tesla was able to achieve its stellar results despite its small vehicle lineup.
“Taking almost 20% market share during a year with record-high new car sales is remarkable in itself. When a brand also achieves such volumes with so few models, it says a lot about both demand and Tesla’s impact on the Norwegian market,” Stokke stated.
Elon Musk
SpaceX gains favor as Pentagon embraces Musk-style defense reform
The remarks highlighted Musk’s improving relationship with the White House, as well as SpaceX’s growing role in U.S. defense.
SpaceX emerged as a clear beneficiary of the Trump administration’s renewed push to accelerate military innovation, as Defense Secretary Pete Hegseth openly praised Elon Musk’s private space enterprise during a visit to the company’s Starbase launch site in Texas.
The remarks highlighted Musk’s improving relationship with the White House, as well as SpaceX’s growing role in U.S. defense.
Hegseth embraces Elon Musk’s pace
Speaking at SpaceX’s Starbase facility in Brownsville, Texas, Hegseth criticized what he described as a “risk-averse culture” among traditional defense contractors and called for faster innovation modeled after Musk’s approach. He confirmed that the Department of Defense plans to integrate Musk’s Grok AI platform into Pentagon systems, which is part of the administration’s efforts to make the U.S. military an “AI-first warfighting force.”
Hegseth stated that the Pentagon intends to deploy AI models across both classified and unclassified networks, signaling a willingness to push past earlier efforts to limit military use of artificial intelligence. His comments aligned closely with President Donald Trump’s recent call for a $500 billion increase in defense spending, Bloomberg News noted. Trump has also warned major contractors that slower production and shareholder-focused practices could put future contracts at risk.
While Hegseth criticized legacy defense firms, SpaceX was held up as an example of how aggressive timelines, vertical integration, and iterative development could reshape defense strategies. “We need to be blunt here; we can no longer afford to wait a decade for our legacy prime contractors to deliver a perfect system. Winning requires a new playbook. Elon wrote it with his algorithm: question every requirement, delete the dumb ones and accelerate like hell,” Hegseth said.
SpaceX’s expanding defense role comes into focus
SpaceX has become one of the U.S. government’s most important aerospace partners. The company holds roughly $4 billion in NASA contracts to develop Starship into a lunar lander, while also serving as a key launch provider for sensitive national security payloads using its Falcon 9 and Falcon Heavy rockets.
During the visit, Musk highlighted that his ambitions extend beyond defense contracts, reiterating long-term goals of interplanetary travel and eventual exploration beyond the solar system. Still, the optics of the event reinforced how closely SpaceX’s capabilities now align with U.S. strategic priorities.
The appearance also marked another step in Musk’s political rehabilitation after a public falling-out with the White House last year. Since leaving his role leading the Department of Government Efficiency, Musk has gradually reengaged with the administration, reconnecting with U.S. President Donald Trump during slain conservative activist Charlie Kirk’s tribute and attending events at the White House. Trump’s also recently suggested that Starlink could help restore internet access in Iran.
Tesla has launched a new Model Y configuration in the “Premium” trim, and it comes with three highly requested features that have launched in markets outside of the U.S. and in other trims.
Tesla announced on Monday night that it has officially launched the Model Y Premium in a seven-seat configuration, which also comes standard with a 16″ touchscreen and black headliner, both of which are featured in the Model Y Performance trim.
The seven-seat configuration is highly requested by consumers and helps fill out the more spacious SUV offering that the lineup has missed outside of the Model X, which prices out many consumers. This new upgrade only costs $2,500 extra for all three features, bringing the cash price to $48,990.
This also comes with the larger 16” touchscreen! pic.twitter.com/aiAxWUTKZa
— TESLARATI (@Teslarati) January 13, 2026
The move to add the seven-seat configuration with the black headliner and additional screen size is a welcome addition, as many Tesla fans have asked the company to come out with an SUV with more seating capacity. Although it is not a full-size SUV, the additional seating will certainly attract some buyers with bigger families.
It appears the third row is slightly more spacious than the past iteration of the seven-seat Model Y, which was available in the previous design pre-Juniper:
Credit: Tesla
However, it definitely still appears to be pretty cramped in terms of legroom. It will definitely be a seating arrangement for smaller passengers, mostly reserved for children.
The other two upgrades are the black headliner, which was launched in other markets and in the Model Y Performance. Many owners have wanted this change, and Tesla listened, but is only offering it with the seven-seat configuration. It also has a larger 16″ touchscreen, also present in the Model Y Performance exclusively:
Credit: Tesla
It is a nice touch to add these highly requested features to the all-electric crossover, which was the best-selling vehicle in the world for the third consecutive year.
Tesla counters Norway’s VAT hike with dedicated consumer bonus
SpaceX gains favor as Pentagon embraces Musk-style defense reform
