Tesla Inc. is facing an international backlash over self-driving promises the carmaker made nearly a decade ago, with class actions now spanning California, Australia, and a fresh European campaign. The suits have been filed just two days before Tesla is set to report its first-quarter earnings.
Latest Developments
The latest front in the legal battle opened last week in the Netherlands, where a Dutch Tesla owner launched a campaign organizing European drivers who paid thousands for automated driving they still cannot access. An Australian law firm is also pursuing a parallel class action accusing Tesla of selling vehicles incapable of fully autonomous driving. In California, an 80-year-old retired attorney who paid $8,000 for Full Self-Driving in 2017 won class-action certification in September on behalf of roughly 3,000 Tesla owners seeking refunds.
The Hardware 3 Problem
At the center of each case is Hardware 3, the outdated computer system installed in millions of Teslas. Wall Street analysts say that this system can no longer run Elon Musk’s most sophisticated Full Self-Driving software. Musk told investors in January 2025 that Tesla would eventually upgrade the hardware for lifetime-FSD buyers, calling the process “painful and difficult.” However, since then, there has been no public update on the plan.
What’s Next for Tesla
The lawsuits come at an awkward moment for Tesla, as the company reports Q1 earnings after the close on Wednesday. Prediction markets are pricing in near-certainty that Musk will address Full Self-Driving on the call. However, whether he speaks to the growing legal pressure and to the millions of owners stuck with outdated hardware remains to be seen.
Market Predictions
Polymarket traders are skeptical that Tesla is on track to hit other targets. The likelihood of a California Robotaxi launch by June 30 is priced at 15%, and the chances of Optimus hitting public sale by the same date sit at 7%. A contract on the Robovan gives a 23% chance it will be available for sale before the end of the year.
Tesla’s Current Standing
Tesla shares are trading around $395 after rallying into earnings on AI5 chip optimism and robotaxi expansion to Dallas and Houston. Q1 deliveries of 358,023 missed consensus, and analysts expect EPS near 37 cents on revenue around $22.26 billion. As the company navigates these challenges, one thing is clear: the road ahead for Tesla will be filled with obstacles, both in the courtroom and on the road.