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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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Tesla executive Lars Moravy appeared today in front of the U.S. Senate Commerce Committee to highlight the importance of modernizing autonomy standards by establishing a federal framework that would reward innovation and keep the country on pace with foreign rivals.
Moravy, who is Tesla’s Vice President of Vehicle Engineering, strongly advocated for Congress to enact a national framework for autonomous vehicle development and deployment, replacing the current patchwork of state-by-state rules.
These rules have slowed progress and kept companies fighting tooth-and-nail with local legislators to operate self-driving projects in controlled areas.
Tesla already has a complete Robotaxi model, and it doesn’t depend on passenger count
Moravy said the new federal framework was essential for the U.S. to “maintain its position in global technological development and grow its advanced manufacturing capabilities.
He also said in a warning to the committee that outdated regulations and approval processes would “inhibit the industry’s ability to innovate,” which could potentially lead to falling behind China.
Being part of the company leading the charge in terms of autonomous vehicle development in the U.S., Moravy highlighted Tesla’s prowess through the development of the Full Self-Driving platform. Tesla vehicles with FSD engaged average 5.1 million miles before a major collision, which outpaces that of the human driver average of roughly 699,000 miles.
Moravy also highlighted the widely cited NHTSA statistic that states that roughly 94 percent of crashes stem from human error, positioning autonomous vehicles as a path to dramatically reduce fatalities and injuries.
🚨 Tesla VP of Vehicle Engineering, Lars Moravy, appeared today before the U.S. Senate Commerce Committee to discuss the importance of outlining an efficient framework for autonomous vehicles:
— TESLARATI (@Teslarati) February 4, 2026
Skeptics sometimes point to cybersecurity concerns within self-driving vehicles, which was something that was highlighted during the Senate Commerce Committee hearing, but Moravy said, “No one has ever been able to take over control of our vehicles.”
This level of security is thanks to a core-embedded central layer, which is inaccessible from external connections. Additionally, Tesla utilizes a dual cryptographic signature from two separate individuals, keeping security high.
Moravy also dove into Tesla’s commitment to inclusive mobility by stating, “We are committed with our future products and Robotaxis to provide accessible transportation to everyone.” This has been a major point of optimism for AVs because it could help the disabled, physically incapable, the elderly, and the blind have consistent transportation.
Overall, Moravy’s testimony blended urgency about geopolitical competition, especially China, with concrete safety statistics and a vision of the advantages autonomy could bring for everyone, not only in the U.S., but around the world, as well.
Tesla launched a new configuration of the Model Y this week, bringing more complexity to its lineup of the vehicle and adding a new, lower entry point for those who require an All-Wheel-Drive car.
However, the broadening of the Model Y lineup in the United States could signal a somewhat uncomfortable reality for Tesla fans and car buyers, who have been vocal about their desire for a larger, full-size SUV.
Tesla has essentially moved in the opposite direction through its closure of the Model X and its continuing expansion of a vehicle that fits the bill for many, but not all.
Tesla brings closure to Model Y moniker with launch of new trim level
While CEO Elon Musk has said that there is the potential for the Model Y L, a longer wheelbase configuration of the vehicle, to enter the U.S. market late this year, it is not a guarantee.
Instead, Tesla has prioritized the need to develop vehicles and trim levels that cater to the future rollout of the Robotaxi ride-hailing service and a fully autonomous future.
But the company could be missing out on a massive opportunity, as SUVs are a widely popular body style in the U.S., especially for families, as the tighter confines of compact SUVs do not support the needs of a large family.
Although there are other companies out there that manufacture this body style, many are interested in sticking with Tesla because of the excellent self-driving platform, expansive charging infrastructure, and software performance the vehicles offer.
Additionally, the lack of variety from an aesthetic and feature standpoint has caused a bit of monotony throughout the Model Y lineup. Although Premium options are available, those three configurations only differ in terms of range and performance, at least for the most part, and the differences are not substantial.
Minor Expansions of the Model Y Fail to Address Family Needs for Space
Offering similar trim levels with slight differences to cater to each consumer’s needs is important. However, these vehicles keep a constant: cargo space and seating capacity.
Larger families need something that would compete with vehicles like the Chevrolet Tahoe, Ford Expedition, or Cadillac Escalade, and while the Model X was its largest offering, that is going away.
Tesla could fix this issue partially with the rollout of the Model Y L in the U.S., but only if it plans to continue offering various Model Y vehicles and expanding on its offerings with that car specifically. There have been hints toward a Cyber-inspired SUV in the past, but those hints do not seem to be a drastic focus of the company, given its autonomy mission.
Model Y Expansion Doesn’t Boost Performance, Value, or Space
You can throw all the different badges, powertrains, and range ratings on the same vehicle, it does not mean it’s going to sell better. The Model Y was already the best-selling vehicle in the world on several occasions. Adding more configurations seems to be milking it.
The true need of people, especially now that the Model X is going away, is going to be space. What vehicle fits the bill of a growing family, or one that has already outgrown the Model Y?
Not Expanding the Lineup with a New Vehicle Could Be a Missed Opportunity
The U.S. is the world’s largest market for three-row SUVs, yet Tesla’s focus on tweaking the existing Model Y ignores this. This could potentially result in the Osborne Effect, as sales of current models without capturing new customers who need more seating and versatility.
Expansions of the current Model Y offerings risk adding production complexity without addressing core demands, and given that the Model Y L is already being produced in China, it seems like it would be a reasonable decision to build a similar line in Texas.
Listening to consumers means introducing either the Model Y L here, or bringing a new, modern design to the lineup in the form of a full-size SUV.
Elon Musk
Elon Musk reiterates Tesla Optimus’ most sci-fi potential yet
Musk shared his comments in a series of posts on social media platform X.
Elon Musk recently reiterated one of the most ambitious forecasts for Tesla’s humanoid robot, Optimus, stating it could become the first real-world example of a Von Neumann machine. He also noted once more that Optimus would be Tesla’s biggest product.
Musk shared his comments in a series of posts on social media platform X.
Optimus as a von Neumann machine
In response to a post on X that pondered on sci-fi timelines becoming real, Musk wrote that “Optimus will be the first Von Neumann machine, capable of building civilization by itself on any viable planet.” In a separate post, Musk wrote that Optimus will be Tesla’s “biggest product ever,” a phrase he has used in the past to describe the humanoid robot’s importance to the electric vehicle maker.
A Von Neumann machine is a class of theoretical self-replicating systems originally proposed in the mid-20th century by the mathematician John von Neumann. In his concept, von Neumann described machines that could travel to other worlds, use local materials to create copies of themselves, and carry out large-scale tasks without outside intervention.
Elon Musk’s broader plans
Considering Musk’s comments, it appears that Optimus would eventually be capable of performing complex work autonomously in environments beyond Earth. If Optimus could achieve such a feat, it could very well unlock humanity’s capability to explore locations beyond Earth. The idea of space exploration becomes more than feasible.
Elon Musk has discussed space-based AI compute, large-scale robotic production, and the role of SpaceX’s Starship in transporting hardware and materials to other planets. While Musk did not detail how Optimus would fit with SpaceX’s exploration activities, his Von Neumann machine comments suggest he is looking at Tesla’s robotics as part of a potential interplanetary ecosystem.
Tesla exec pleads for federal framework of autonomy to U.S. Senate Committee
Tesla Model Y lineup expansion signals an uncomfortable reality for consumers
