Delaware
Tesla wins right to move lawsuits from Delaware to Texas. Here’s why
How can car buyers look for value in the used electric vehicle market
For those in the market for a used electric vehicle, looking beyond Tesla vehicles might offer good value.
- A Delaware court has ruled that Tesla can move shareholder lawsuits against it to Texas.
- Stockholders sued to keep the legal proceedings in Delaware, but the court dismissed their case.
- The ruling upholds the decision made by the corporation’s owners on where to pursue litigation.
Tesla has won the right to move lawsuits filed against the company from Delaware to Texas, where it’s presently headquartered.
A judge in Delaware sided with Tesla, which was founded in California but is now based in Austin in a case involving stockholders who sued to challenge Tesla’s relocation plans in 2024.
Tesla had asked the court to dismiss the motion from its stockholders who were upset at its plans to convert from a Delaware corporation for legal purposes to a Texas-based organization. Tesla had previously designated Delaware as its exclusive forum for cases involving shareholders who sue a company in which they own stock in, but the company was seeking to change the designation to Texas.
The court said Delaware law requires it to only deny forum-selection decisions by corporations such as Tesla “to the limited extent necessary” to avoid a result that would be inequitable to the automaker or any other company that was based in the state.
The court said on the “on the present facts, it is not inequitable” to Telsa to uphold Delaware laws regarding court case jurisdictions.
Tesla did not respond to a request for comment on the lawsuit.
Why is Tesla being sued?
Tesla was sued by at least three of its stockholders in April 2024 after it announced plans to convert from a Delaware corporation to a Texas one.
Tesla stockholders voted to approve the move, but the people who filed the lawsuits argued that Delaware’s laws about the appropriate forum for shareholder cases should have been enforced over Texas’ laws because Tesla was still based in Delaware legally when they filed their lawsuits.
The lawsuits were combined by the court, and the court later ruled in favor of granting Tesla’s motion to dismiss the case.
What does Tesla being sued mean for car buyers?
Tesla has faced legal troubles and federal investigations for years. The company’s legal troubles could impact the availability of popular models like the Tesla Model Y and Model 3 if a court finds the company liable and requires a payment to victims that alters Tesla’s findings. Regulators could also declare Tesla’s parts or software defective and order recalls or force the company to stop selling specific models.
Tesla has been sued over its Autopilot and Full Self Driving software, and the company has also faced class action lawsuits and product liability cases for accidents in which people were injured or even killed.
Tesla is also the subject of five open federal investigations, including one the U.S. National Highway Traffic Safety Administration announced in December 2025 looking into potential issues with passengers having difficulty exiting Tesla Model 3 and Model Y vehicles following crashes.