Key Points:

1. On August 18, 2025, a United States District Judge granted a motion for class certification and appointed a representative plaintiff of the certified classes

   
   

2. The court narrowed the classes and considered whether it was appropriate to hear the plaintiffs’ claims together in one class action

   
   

3. The lesson here is that businesses need to be careful about what kinds of statements they make about their technology’s capabilities, or else they could face litigation from many plaintiffs, potentially leading to a class action

On August 18, 2025, a United States District Judge, Rita F. Lin, granted a motion for class certification and appointed a representative plaintiff of the certified classes. In addition, she appointed class counsel and set a pathway for next steps leading to the case management conference.

Let this story serve as a warning for businesses—be careful about what statements you make about the capabilities of your technology—whether it is on Twitter, YouTube, or any other channel. If you have a goal that you are striving to achieve, then say that. If you are promoting a new product with extensive capabilities, then do that. Just try not to make claims that are untrue, unless you want to be on the hook for those misleading misrepresentations.

What is the Class Action About?

Tesla did not sell its vehicles through third parties and did not engage in traditional marketing or advertising; in fact, the only way one could buy a Tesla vehicle was through its website. Tesla reached consumers also through its own YouTube channel, Instagram account, press conferences, sales events, marketing newsletters, and Elon Musk’s personal Twitter account.

Additionally, customers could buy optional technology packages that were designed to enable autonomous vehicle operation. For example, customers could buy the “Enhanced Autopilot Package (EAP)” that had features such as Autopark, Dumb Summon, Actually Smart Summon, and Navigate on Autopilot (highway). Also, the “Full Self-Driving (FSD) Package” had all of the Enhanced Autopilot features, plus Stop Sign and Traffic Signal recognition and Autosteer on Streets. The EAP was offered as a stand-alone package only until the first quarter of 2019, and again for a limited period from the second quarter of 2022 through the second quarter of 2024; at other times, these features were only available as part of the FSD Package.

Essentially, claimants were arguing that Tesla Inc. (Tesla) made misleading statements about the full self-driving capability of its vehicles. The plaintiffs alleged that they relied on two types of misrepresentations that Tesla made:

• that Tesla vehicles were equipped with the hardware necessary for full self-driving capability (“Hardware Statement”)

  
  

• that a Tesla vehicle would be able to drive itself across the country within the following year (“Cross-Country Statement”)

When it came to the Hardware Statement, in October, 2016, Musk said at a press conference that second-generation autonomous driving hardware would have hardware necessary for Level 5 Autonomy (“literally meaning hardware capable of full self-driving for driver-less capability”). These statements were also on Tesla’s website and Tesla’s November 2016 newsletter. There was even a Tesla blog post dated October 2016 and a Tesla quarterly earnings call in May 2017 containing these statements.

Musk even made comments that the self-driving hardware would enable full self-driving capability at a safety level that was greater than a human driver. Since 2016, the hardware had been updated to version 3.0 and version 4.0—these upgrades had a more powerful computer and cameras.

In a 2024 earnings call, Musk stated that a further hardware upgrade would likely be necessary for customers who bought FSD with prior hardware configurations:

“I mean, I think the honest answer is that we’re going to have to upgrade people’s hardware 3 computer for those that have bought full self driving. And that is the honest answer. And that’s going to be painful and difficult, but we’ll get it done. Now I’m kind of glad that not that many people bought the FSD package”

When it came to the Cross-Country Statement, Musk stated at a 2016 press conference that people would be able to go from LA to New York—going from home in LA to dropping someone off in Times Square and then having the car park itself, without the need for a single touch including the charger. Musk posted versions of this claim on his personal Twitter account three times. In January 2016, Musk tweeted that “in 2 years, summon should work anywhere connected by land & not blocked by borders, eg you’re in LA and the car is in NY”.

When asked for an update on these claims in May, 2017, Musk said that the demo was still on for the end of the year, and things were “just software limited”. And in May, 2019, when asked whether there were still plans to drive from NYC to LA on full autopilot, Musk said that he could have gamed this type of journey the previous year, but when he did it in 2019, everyone with Tesla Full Self-Driving would be able to do it too. That 2019 tweet generated about 2,000 engagements compared to 300 engagements following the 2016 tweet.

In October, 2016, Tesla showed a video where a Tesla vehicle was driving autonomously (it is still on the Tesla site) and a similar video was shown on YouTube.

Interestingly, Tesla does not dispute that any of the statements or videos were made—it simply states that the FSD could not be obtained until the completion of validation and regulatory approval. However, the plaintiff presented evidence that Tesla had not applied for regulatory approval to deploy a Society of Automotive Engineers Level 3 or higher vehicle in California, which was a necessary step for approval of a full self-driving vehicle.

In terms of the technical claims, the plaintiffs alleged that Tesla violated California’s:

• Unfair Competition Law

  
  

• Consumer Legal Remedies Act

  
  

• False Advertising Law

In addition, they alleged that Tesla engaged in fraud, negligent misrepresentation, and negligence.

As a consequence, they filed a motion for class certification so that they could proceed to the next stage of litigation.

What did the District Judge Decide?

The judge had to go through the main elements to determine whether she could certify the class in the class action.

With respect to the proposed class representative, the main plaintiff paid Tesla $5,000 for EAP and $3,000 for the FSD Packages for his new Tesla Model S car. He alleged that he purchased these packages because he was misled by the Hardware Statement and the Cross-Country Statement. He saw these things on the Tesla website in October, 2016 and in a Tesla newsletter sent in November, 2016. In addition, he read statements that led him to believe that a Tesla would soon drive across the country, and that self-driving software would be available in the next year or two. He claimed that he discovered the alleged fraud in April, 2022.

In fact, five customers (including the above plaintiff) brought separate lawsuits against Tesla in September, 2022. They alleged similar things and accused Tesla of violating warranties, consumer protection statutes and engaged in fraud, negligence, and negligent misrepresentation. The court consolidated the cases, dismissal all warranty claims, and permitted all the plaintiffs’ fraud, negligence, and statutory claims to proceed to the extent that they were premised on the Hardware Statement and Cross-Country Statement. It is worth mentioning that some plaintiffs opted out of Tesla’s arbitration agreement.

Subsequently, the court noted that the class certification was a two-step process:

• The plaintiff had to show that four requirements were met, namely numerosity (the class was so numerous that joinder of all members was impractical), commonality (there were questions of fact and law), typicality (the claims and defenses were typical of the claims and defenses of the class), and adequacy (the representative parties would fairly and adequately protect the interests of the class)

  
  

• The plaintiff had to show that one of the bases for certification was met, such as predominance and superiority (questions of law or fact common to class members predominated over any questions affecting only individual members, and a class action was superior to other available methods for fairly and efficiently adjudicating the controversy

The judge concluded the following:

• There were some minor differences with the proposed classes. The judge certified two classes: (1) a California arbitration opt-out class where customers bought or leased a Tesla vehicle and bought the FSD package between May 207 and July 2024, and opted out of Tesla’s arbitration agreement; (2) a California pre-arbitration class where customers bought or leased a Tesla vehicle and paid for the FSD package from October 2016 to May 2017, and currently reside in California. Neither class dealt with the EAP, and both classes were narrowed slightly

  
  

• Tesla did not contest that numerosity was met

  
  

• The plaintiff was able to show that commonality and predominance were met. For the purposes of class certification, the claims were martially indistinguishable and could be analyzed together

  
  

• The plaintiff could show that the Hardware Statement would be material to an FSD purchaser. However, the plaintiff could not show common exposure to the Cross-Country Statement

  
  

• The plaintiff could show that the issue of whether Tesla vehicles were equipped with hardware sufficient for Full Self-Driving capability was subject to common proof

  
  

• The plaintiff was able to show that damages could be established through common proof. Under California law, the proper measure of restitution was the difference between what the plaintiff paid and the value of what the plaintiff received

  
  

• Although Tesla argued that there were many claims that were subject to the statute of limitations, separate examinations of each situation with each plaintiff were needed. The court disagreed and said that this was not fatal to class certification when there was a sufficient nucleus of common questions

  
  

• The requirement of adequacy was met

  
  

• Superiority was also established. The economies of scale made it desirable to concentrate all of the plaintiffs’ claims in one forum, and this case was manageable as a class action

  
  

• The court certified a narrower class, namely all members of the California Arbitration Opt-Out class and California Pre-Arbitration class who had stated that they wanted to purchase or subscribe to FSD in the future but could not rely on the product’s future advertising or labelling

  
  

• The plaintiff showed that he had standing to seek injunctive relief, since he had provided the general contours of an injunction that could be given greater substance at a later stage in the case

Accordingly, all elements were met, and the class certification was granted, subject to the modified class definitions. Within 14 days, the plaintiff had to amend the class definition so that the parties could move on to the case management conference.

The court also appointed the main plaintiff as the representative plaintiff for the class, and appointed class counsel.

What can we Take from This Development?

This was simply a motion to certify the class action. The judge went through the main elements and confirmed that the class action could move forward. The examination of each of the components in the test had to do with whether it was more effective to hear the claims together in one class action instead of addressing each claim separately in the court.

This was not a decision that confirmed Tesla engaged in unfair competition, false advertising, negligent misrepresentation, or negligence. This was a preliminary decision that allowed the class action to proceed.