Elon Musk’s Tesla faces class action in Australia over car defects

Tesla owners have stunned the Australian motoring industry with a move against Elon Musk’s company.

Disgruntled Tesla owners in Australia have launched legal proceedings in the Federal Court against Elon Musk’s car manufacturer, claiming the company sold vehicles with major defects while also over-promising on the abilities of its cars.

The consumer action filed against Tesla Motors Australia by Australian firm JGA Saddler targets the sales of Model 3 and Y cars manufactured by the US-based Tesla Inc.

Both those models accounted for more than 40 per cent of Australian EV sales in 2024 despite the surge of Chinese brands entering the EV market.

The class action will target three alleged problems with the Model 3 and Y cars, including ‘phantom braking’, poor battery range and lack of autonomous driving.

“Tesla made promises about their vehicles’ safety, performance and features such as their ‘full self-driving’, but it appears some of these promises are falling flat,” JGA Saddler director Rebecca Jancauskas told AAP.

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Tesla Model 3s and Ys are being targeted in an Australian class action. Picture: Getty Images

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Ms Jancauskas said ‘phantom braking’, the potential for a vehicle to activate its emergency braking systems for no reason while in cruise control, was a huge problem for Tesla drivers in Australia.

“This dangerous phenomenon … would terrify you and your passengers and could, if it causes an accident, result in serious injury and/or death,” Ms Jancauskas said.

While the braking issue is a safety matter, the battery and autonomous driving issues are a matter of Tesla failing to deliver on its promises to customers, according to the class action.

“Imagine your EV has never reached 75 per cent of its advertised battery range, or the promised self-driving features, that you paid a premium of more than $5000 for, have never been delivered,” Ms Jancauskas said.

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Elon Musk’s Tesla has risen in value despite plenty of scutiny over safety and tech abilities both in Australia and the US. Picture: AFP

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“For many Tesla drivers these issues are their daily reality.”

Ms Jancauskas said Tesla had continued to advertise its vehicles in Australia above and beyond the reality its customers were facing once they received their vehicles.

“It is hoped this claim underscores the importance for all EV manufacturers to be truthful in their marketing, deliver on their promises, and ensure their products are safe and reliable,” she said.

Drivers who purchased or leased a Model 3 or Y with Tesla Vision, a camera-based system that assisted with automated driving, since May 2021 are eligible to join the class action.

Tesla did not immediately respond to media requests for comment.

The class action is being financially backed by litigation funder Woodford on a ‘no win, no fee’ basis.

Demonstrators protest against Elon Musk and Tesla in the US... Australian owners are starting to make their own moves. Picture: AFP

If it is successful, Woodford will apply for Federal Court approval to recoup its legal costs plus a commission taken out of the winnings.

Mr Musk’s Tesla has also faced criticism from US officials and been forced to recall millions of defective vehicles.

So far in 2025, there have been two major recalls in the US, affecting more than 370,000 vehicles with power steering problems and about 239,000 vehicles with a rear-view camera issue that could increase the risk of collisions.

In 2024, the company recalled almost 700,000 vehicles in the US due to issues with the tyre-pressure warning system and about 1.85 million vehicles due to a software failure to detect an unlatched hood.

Originally published as Elon Musk’s Tesla faces class action in Australia over car defects