In a significant legal development, Tesla Motors Australia is facing a class action lawsuit filed in the Federal Court of Australia. The lawsuit, initiated by Brisbane-based law firm JGA Saddler, alleges that Tesla has misrepresented the capabilities of its electric vehicles, particularly concerning autonomous driving features and battery range. This legal action focuses on the popular Model 3 and Model Y vehicles, which together account for over 40% of all battery-only car sales in Australia in 2024.
Key Allegations
The class action centers around three main issues:
1. Phantom Braking
One of the primary complaints in the lawsuit is the phenomenon known as “phantom braking.” This issue reportedly causes Tesla vehicles to engage emergency braking unexpectedly and inappropriately while in cruise control or Autopilot modes. According to the plaintiffs, this malfunction poses a significant safety risk, potentially leading to accidents, injuries, or even fatalities.
2. Misleading Autonomous Driving Claims
The lawsuit alleges that Tesla has overstated the autonomous driving capabilities of its vehicles. Despite charging premiums of over $5,000 for features like ‘Full Self-Driving’ and Autopilot, the plaintiffs argue that these systems have failed to deliver the promised level of autonomy.
The third allegation concerns Tesla’s claims about battery range. Some owners report that their vehicles have never achieved even 75% of the advertised maximum range, leading to accusations of misleading marketing practices.
Affected Models and Timeframe
The class action specifically targets Tesla Model 3 and Model Y vehicles purchased in Australia between May 2021 and February 2025. These models are equipped with Tesla Vision, a camera-based system that replaced the previous radar-based technology for assisted driving features.
Tesla Vision and Its Role
In 2021, Tesla transitioned from radar-based systems to a camera-only approach called Tesla Vision for its Model 3 and Model Y vehicles. This system relies on eight cameras to enable features such as Autonomous Emergency Braking (AEB), Forward Collision Warning, Blind Spot Collision Warning, and Lane Departure Avoidance. The lawsuit suggests that this transition may be linked to some of the reported issues, particularly the phantom braking problem.
Legal Representation and Funding
The class action is being led by Rebecca Jancauskas, director of JGA Saddler. The lawsuit is financially backed by litigation funder Woodsford on a “no win, no fee” basis. If successful, Woodsford will apply for Federal Court approval to recoup its legal costs plus a commission from the winnings.
Potential Impact and Compensation
If the class action succeeds, affected Tesla owners may be entitled to compensation for the alleged misleading claims and defective vehicle performance. The exact amount of potential compensation has not been specified, but it could be substantial given the premium pricing of Tesla vehicles and the nature of the allegations
Tesla’s Response and History of Recalls
As of the filing of the lawsuit, Tesla has not publicly responded to the allegations. However, the company has faced scrutiny in other markets and has been forced to recall millions of vehicles globally for various issues. In the United States alone, Tesla has issued several major recalls in recent years:
- In 2025, over 370,000 vehicles were recalled for power steering problems, and about 239,000 for a rear-view camera issue.
- In 2024, nearly 700,000 vehicles were recalled due to issues with the tire-pressure warning system, and approximately 1.85 million for a software failure related to hood latch detection.
These recalls highlight the ongoing challenges Tesla faces in maintaining the reliability and safety of its vehicles across global markets.
Implications for the EV Industry
The lawsuit against Tesla in Australia raises broader questions about the marketing practices and technological claims of electric vehicle manufacturers. Rebecca Jancauskas of JGA Saddler emphasized that the legal action aims to “underscore the importance for all EV manufacturers to be truthful in their marketing, deliver on their promises, and ensure their products are safe and reliable.
This case could set a precedent for how electric vehicle capabilities, particularly those related to autonomous driving and battery performance, are advertised and delivered to consumers. It may also lead to increased scrutiny of other EV manufacturers’ claims and practices.
Consumer Trust and Brand Reputation
The class action lawsuit comes at a time when Tesla’s brand reputation is already under pressure in various markets. In Europe, for instance, Tesla sales have reportedly plunged, partly attributed to consumer response to controversies surrounding CEO Elon Musk. The Australian lawsuit could further impact consumer trust in the brand, potentially affecting sales and market position in the region.
Technical Aspects of the Allegations
Phantom Braking
The phantom braking issue is particularly concerning from a safety perspective. It involves the vehicle’s Automatic Emergency Braking (AEB) system engaging abruptly and inappropriately, which can startle drivers and passengers and potentially lead to rear-end collisions or other dangerous traffic situations.
Autonomous Driving Capabilities
Tesla’s Autopilot and Full Self-Driving (FSD) features have been central to the company’s marketing efforts. However, the lawsuit alleges that the hardware in Tesla vehicles is incapable of supporting fully autonomous or near-autonomous driving, despite statements or representations to the contrary.
Battery Range Discrepancies
The allegation regarding battery range focuses on the discrepancy between the range displayed by the vehicle’s instruments when the battery charge is above 50% and the actual achievable range. This issue, if proven, could have significant implications for consumer expectations and the practical usability of the vehicles for long-distance travel.
Legal and Regulatory Implications
The class action in Australia adds to the growing list of legal and regulatory challenges faced by Tesla worldwide. It highlights the need for clearer standards and regulations regarding the marketing and implementation of advanced driver assistance systems (ADAS) and autonomous driving technologies.
Consumer Advice and Next Steps
For Australian Tesla owners who believe they may be affected by the issues outlined in the class action, the lawsuit provides an opportunity to seek legal redress. Owners of Model 3 and Model Y vehicles purchased between May 2021 and February 2025 are eligible to join the class action.
The Tesla class action in Australia represents a significant challenge for the electric vehicle manufacturer, touching on core aspects of its technology and marketing claims. As the case progresses, it will likely draw attention to the broader issues of accountability and transparency in the rapidly evolving electric vehicle market.
The outcome of this lawsuit could have far-reaching implications, not just for Tesla, but for the entire automotive industry as it transitions towards electric and autonomous technologies. It underscores the importance of aligning marketing claims with actual vehicle capabilities and the need for robust safety measures in advanced driving assistance systems.
As the legal proceedings unfold, consumers, industry observers, and regulators will be watching closely to see how these allegations are addressed and what impact they may have on the future development and marketing of electric and autonomous vehicles.