Tesla (NASDAQ:TSLA) Faces First Legal Setback in Autopilot Lawsuit
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Tesla (NASDAQ:TSLA) Faces First Legal Setback in Autopilot Lawsuit

Story Highlights

Tesla has encountered its first setback in a lawsuit concerning its Autopilot driver assistance system. This ruling opens the door for the plaintiff to pursue punitive damages from the company.

Tesla (NASDAQ:TSLA) has faced its first legal setback in a lawsuit involving its Autopilot driver assistance system. A Florida court judge has found reasonable evidence that CEO Elon Musk and TSLA’s staff engineers were aware of flaws in its driver assistance technology. This ruling permits the plaintiff in a lawsuit stemming from a fatal 2019 crash to seek punitive damages from Tesla.

In 2019, one of Tesla’s Model 3 vehicles smashed into a turning 18-wheel truck, resulting in the car’s roof being sheared and the driver losing his life.

Judge’s Findings

Judge Reid Scott noted that the Florida accident bore striking similarities to another fatal crash that occurred in 2016. In that incident, a Tesla Model S failed to detect a crossing truck and subsequently collided with the trailer at a high speed.

The judge concluded that Musk and TSLA officials were aware of the Autopilot feature’s inability to detect cross-traffic. Despite having this knowledge, they failed to implement any technological modifications to address this issue in the nearly three years between the two accidents.

Setback for Tesla

The recent ruling represents a setback for Tesla, following its successful defense in two California product liability trials related to the Autopilot system earlier this year.

The company could face substantial financial repercussions, potentially amounting to millions or even billions of dollars in punitive damages.

Is Tesla a Good Stock to Buy Right Now?

Analysts are currently cautious about Tesla’s stock trajectory. On TipRanks, TSLA has a Hold consensus rating based on 14 Buys, 13 Holds, and six Sell ratings. Also, the average price forecast of $247.29 implies 2.5% upside potential from current levels. Year-to-date, the stock has jumped 123.1%.


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