Tesla Hit With Class Action Over ‘Phantom Braking’ Issue

Tesla is facing a major legal battle in Australia, as Model 3 and Model Y owners launch a class-action lawsuit against the electric vehicle giant. The lawsuit, filed in the Federal Court by Brisbane-based law firm JGA Saddler, alleges that Tesla misrepresented the capabilities of its vehicles, including issues with phantom braking, exaggerated autonomous driving features, and misleading claims about battery range.

Tesla Owners Fight Back Over ‘Defective’ Vehicles

Australian motorists who purchased or leased a Tesla Model 3 or Model Y from 2021 onwards are claiming that the company’s promises about its cutting-edge technology have fallen short. The lawsuit is being financially backed by litigation funder Woodsford on a “no win, no fee” basis, meaning affected Tesla owners can participate without upfront legal costs.

JGA Saddler Director Rebecca Jancauskas emphasized that Tesla’s marketing has misled consumers. “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,” she said.

Phantom Braking Poses a Danger to Drivers

One of the primary complaints in the class action is the issue of “phantom braking,” where Tesla’s Autopilot system allegedly applies emergency braking without cause. This unexpected braking can startle drivers and passengers and, in worst-case scenarios, lead to rear-end collisions or dangerous traffic situations.

“Tesla vehicles have the propensity to autonomously engage automatic emergency braking abruptly in inappropriate circumstances, leading to a risk of collisions,” JGA Saddler stated. “This dangerous phenomenon … would terrify you and your passengers and could, if it causes an accident, result in serious injury and/or death.”

Tesla has not yet responded publicly to the allegations.

Autonomy Claims Under Fire

The lawsuit also claims that Tesla’s much-hyped ‘Full Self-Driving’ and Autopilot capabilities have not delivered the autonomous experience the company advertises. Tesla Vision, the camera-based system designed to enable automated driving, has reportedly failed to achieve the self-driving functionality many buyers expected.

Despite charging thousands of dollars for Full Self-Driving capability, Tesla has not yet delivered a truly autonomous experience in Australia. “Imagine your EV has never reached 75 percent 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,” Jancauskas said.

Battery Range Claims in Question

Another major point of contention is Tesla’s advertised battery range. The lawsuit alleges that Model 3 and Model Y vehicles fail to achieve their advertised maximum range, particularly when the battery level drops below 50 percent. This discrepancy between real-world performance and Tesla’s marketing claims has left many owners frustrated.

Tesla’s Declining Sales and Growing Legal Troubles

Tesla has seen a drop in Australian sales, with a 16.8% decline in 2024 compared to the previous year. While the overall EV market grew by 4.7% in Australia, Tesla’s dominance has slipped. Despite remaining the top-selling EV brand in the country, its market share has dropped from 52.9% in 2023 to 42% in 2024.

The company is also facing increased scrutiny overseas. In the United States, Tesla has been forced to recall millions of vehicles over safety concerns. In 2025 alone, Tesla has issued two major recalls affecting more than 600,000 vehicles due to power steering issues and rear-view camera malfunctions.

What Happens Next?

Tesla has yet to comment on the Australian class action, but if the case proceeds successfully, affected Tesla owners may be entitled to compensation for misleading claims and defective vehicle performance.

The lawsuit also raises broader concerns about how EV manufacturers advertise their technology. Jancauskas hopes the case will “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.”

For now, Australian Tesla owners affected by these issues can join the class action and seek legal redress. Meanwhile, Tesla faces increasing pressure to resolve concerns about its technology, as consumer trust in the brand continues to waver.