Tesla’s “activist shareholders” seem to be one of the biggest threats to the company and its CEO, Elon Musk, who has spoken extensively about them in recent times. They’re up to their latest bit of work against the company, suing both Tesla and Musk, accusing them of securities fraud by alleging they concealed “significant risk” over the Robotaxi launch in Austin, Texas.
On Monday night, a group of shareholders sued Tesla and Musk in a proposed class action lawsuit in Texas federal court. They claim Tesla misled investors about the safety of the vehicles used in the Robotaxi rollout in Austin, which started on June 22.
The suit indicates that videos show the vehicles “speeding, exhibiting sudden braking, driving over a curb, entering the wrong lane, and dropping passengers off in the middle of multilane roads.” Reuters first reported on the lawsuit.
The plaintiffs are seeking damages for shareholders between April 19, 2023, and June 22, 2025.
Tesla’s Robotaxi platform has been operating for less than two months, and the company has already expanded its geofence in Austin twice.
🚨 Tesla Austin Robotaxi geofence sizes (in square miles):
Initial: 6/22 – ~20 square miles
First Expansion: 7/14 – ~42 square miles
Second Expansion: 8/3 – ~80 square miles pic.twitter.com/IwnvSJseE4
— TESLARATI (@Teslarati) August 3, 2025
In the roughly six weeks that Robotaxi has been operational, Tesla has only had one incident reported to the Austin Government, and it was a “Safety Concern” in June 2025. Since July 2023, which is when autonomous vehicle operation began in Austin, 130 incidents have been reported. AV Ride, Cruise, Waymo, and Zoox also operate in Austin.
Waymo has the most incidents with 73. Its first was in June 2024 when a unit blocked traffic.
Activist Shareholders
Musk has warned that activist shareholders are potentially dangerous to both Tesla and his position as CEO. He recently spoke about them during the Q2 Earnings Call regarding his stake in the company:
“That is a major concern for me, as I’ve mentioned in the past. I hope that is addressed at the upcoming shareholders meeting. But, yeah, it is a big deal. I want to find that I’ve got so little control that I can easily be ousted by activist shareholders after having built this army of humanoid robots. I think my control over Tesla, Inc. should be enough to ensure that it goes in a good direction, but not so much control that I can’t be thrown out if I go crazy.”
Tesla’s Board yesterday made an attempt to help secure Musk’s stake by offering him a massive 96 million share pay package of restricted stock. It will only help his stake in the company bump up slightly to 14.6 percent from 12.9 percent.