New class action targets Tesla’s self-driving claims and hardware 3 computer

Tesla is facing a new class action lawsuit regarding the functionality and assertions of its self-driving technology, as well as its “hardware 3 computer.”

The electric vehicle manufacturer has been embroiled in several legal battles based on claims about self-driving capabilities, accidents involving advanced driver assist systems, and alleged fiduciary responsibility violations from its CEO and board members. However, a recent lawsuit in Australia introduces a fresh set of allegations against Tesla.

Woodsford and JGA Saddler, two law firms, have initiated a class action lawsuit in the Federal Court of Australia against Tesla Motors Australia Pty Ltd and Tesla, Inc. The lawsuit alleges that Tesla Australia sold defective motor vehicles manufactured by Tesla US.

The firms are currently seeking individuals who have bought or leased a Tesla Model 3 or Y vehicle in Australia between May 2021 and February 2025 to join the lawsuit.

The lawsuit targets Tesla on three primary issues. First, the lawsuit highlights the phantom braking incidents that occur when utilizing Tesla’s Full Self-Driving (FSD) and Autopilot features. These abrupt, autonomous emergency braking events have reportedly led to collision risks.

Secondly, the lawsuit points out the disparity between the advertised maximum range of Tesla vehicles and the actual range they can achieve. Many of these vehicles fail to reach the advertised range or even come close to it when the battery level exceeds 50%.

Lastly, the lawsuit challenges Tesla’s claim that all vehicles produced since 2016 are equipped with hardware capable of supporting autonomous or near-autonomous driving. Despite these claims, the hardware in Tesla vehicles lacks the capacity for fully autonomous or close-to-autonomous driving.

The legal action was triggered by CEO Elon Musk’s recent admission that the Hardware 3 self-driving computer will not be capable of unsupervised self-driving. This revelation marks the first lawsuit addressing this particular issue following Musk’s acknowledgment.

Tesla’s struggles in the Australian market have compounded as sales in the country witnessed a 17% decline last year and a further 33% dip in the initial month of 2025.

Looking ahead, more lawsuits against Tesla, particularly concerning Hardware 3, are anticipated in light of Musk’s admission regarding its limitations. While Tesla has offered retrofits to consumers who purchased the FSD package, legal implications of these actions remain uncertain.

It is evident that Tesla’s claim that all vehicles produced since 2016 possess the hardware for self-driving may have significant ramifications. This assertion may have influenced buyers’ expectations regarding their vehicles’ performance and value retention. As a result, Tesla could potentially be compelled to compensate individuals who have purchased vehicles based on these claims.