Investors Sue Tesla Over Car Safety in Class Action Lawsuit
By Dominic Rivera
A class action lawsuit has been filed against Tesla Motors Inc. on behalf of investors who bought shares of stock of Tesla from May 10 to Nov. 6 this year. The proposed class action lawsuit alleges that Tesla made misleading statement about the safety of its Model S cars.
The Tesla class action lawsuit was filed because of recent fire incidents in Model S cars. According to the lawsuit, Tesla did not reveal the puncture and fire risks in the car’s undercarriage and lithium ion battery pack.
The class action lawsuit is holding Tesla liable for not delivering enough cars to offset the drop in revenue from other sources. In October, Tesla shares dropped 6.2 percent to $180.95 on the Nasdaq after a Model S car caught fire. The car was reported to have ran over a “large metallic object” before the incident. A video of the car on fire was posted on YouTube and the company confirmed its authenticity. The same incident was reported on another Tesla Model S car in Merida, Mexico. The third fire happened near Smyrna, Tennessee.
The Tesla Model S is powered by lithium-ion batteries, a relatively new technology to the auto industry that is much more powerful than the traditional lead-acid batteries. Experts, however, are saying that this carries a larger safety risk.
Ironically, Tesla’s Model S has won the top vehicle safety rating from the National Highway Traffic Safety Administration (NHTSA), getting a five-star rating overall. The rating means that Tesla’s Model S sedan offers exceptional safety to the passengers as it has the lowest possibility of injury to passengers among all major cars sold in the U.S.
The investors in the Tesla Model S Class Action Lawsuit are represented by the law firm of Pomerantz Grossman Hufford Dahlstrom & Gross. The firm specializes in corporate, securities and antitrust suits.
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