Tesla (TSLA, Financial), led by Elon Musk, is facing a legal challenge as a U.S. judge has allowed a consumer lawsuit to proceed. The lawsuit accuses Tesla of failing to inform buyers about a defect that could cause cars to brake automatically without an actual collision risk. The decision was made by Judge Georgia Alexakis in Chicago, who found the case to have merit. The proposed class action claims Tesla concealed the "phantom braking" safety defect from potential buyers.
However, the judge dismissed other parts of the lawsuit, including allegations related to excessive insurance premiums charged by Tesla's insurance division due to alleged collision monitoring defects. Tesla had sought to have the entire lawsuit dismissed.
