Tesla faces its most serious court battle in years

Despite the issues Tesla (TSLA) faces, such as falling demand and slumping sales, the company is still marching forward with Robotaxi, its latest innovation.

Tesla officially debuted its robotaxi concept at an event in October. The event featured a line of driverless Cybercab concept cars driving passengers, who had been drinking, across the Warner Bros. studio lot in Burbank, California.

During the company's earnings call in January, CEO Elon Musk called out those who previously thought he was “crying wolf” about self-driving cars, saying “Teslas will be in the wild with no one in them, in June in Austin,” Musk said during Tesla's Q4 2024 earnings call. “This is not some far-off mythical situation, it's five, six months away.”

Elon was mostly correct.

Tesla robotaxis did indeed hit the streets of Austin, Texas, in June, but Musk overpromised when he said that there would be “no one in them.”

Tesla robotaxis in Austin have a human “safety monitor” sitting in the front seat during autonomous drives.

The “safety monitor” isn't an abnormal safety feature for an autonomous vehicle. Waymo tested its vehicles for six months with a driver and for six months without one in Austin before it launched its commercial service earlier this year, according to Electrek.

However, it is an example of Musk and Tesla promising that the vehicle could do something it actually cannot while fully self-driving.

Tesla is going to trial Monday, July 14, over an FSD-involved car crash in a case that could have huge implications for the company.

Tesla has launched robotaxis using full self-driving software.

Image source: Bloomberg/Getty Images

Tesla faces jury trial in suit over fatal 2019 FSD crash

On Monday, the U.S. District Court for the Southern District of Florida heard opening arguments in a lawsuit filed against Tesla by the family of Naibel Benavides, who was killed in 2019 by a runaway Tesla that had FSD engaged.

The vehicle, driven by George Brian McGee, sped through a T intersection at 62 miles per hour and T-boned an empty parked car.

The parked car's owners were standing outside the vehicle when they were struck. Benavides, 22, was killed in the crash, and her body was found flung about 75 feet from the crash site. Dillon Angulo, her boyfriend, survived the crash but was left with a severe concussion and multiple broken bones.

He is also suing for compensation for medical expenses, along with the family's wrongful death, pain and suffering, and punitive damages claims.

Like other cases involving FSD in the past, Tesla blames the crash on driver error.

“The evidence clearly shows that this crash had nothing to do with Tesla’s Autopilot technology,’’ Tesla said in a statement to Bloomberg.

McGee reportedly dropped his cellphone and was searching for it on the ground when he crashed.

“Instead, like so many unfortunate accidents since cell phones were invented, this was caused by a distracted driver. To his credit, he took responsibility for his actions because he was searching for his dropped cell phone while also pressing the accelerator, speeding, and overriding the car’s system at the time of the crash. In 2019, when this occurred, no crash avoidance technology existed that could have prevented this tragic accident.”

Tesla says that data shows McGee had his foot on the accelerator during the crash and that the driver assistance system could not have overridden that.

Tesla has a history of winning FSD trials while claiming driver error

This isn't the first time Tesla has been sued for Full Self Driving crashes, and it won't be the last. Tesla has three upcoming trials over fatal FSD-related crashes in the next nine months in California.

However, according to Bloomberg, only a handful of FSD crash cases have gone to trial. Tesla usually “resolves” these cases before they reach a courtroom.

However, Tesla has won two previous jury trials in California, one for a fatal crash and one for a non-fatal crash. Both times, the collision was ruled to be driver error.

The judge allowed this case to go to trial.

“A reasonable jury could find that Tesla acted in reckless disregard of human life for the sake of developing their product and maximizing profit,” Judge Beth Bloom wrote in an order issued on July 7.