Tesla wins dismissal of Model 3 court case

The electric auto maker really needed a win after several months of "production hell"

Tesla has not had an easy time of it lately. The company has been facing scrutiny over its plans to go private, which fell through last week, as well as facing accusations of spying on employees.

After all that, it seems like the company deserves a break, and got it today when it successfully convinced a court to dismiss a securities fraud lawsuit that its shareholders filed against it.

The suit alleged that Tesla had knowingly misled shareholders about its Model 3 production schedule.

The plaintiffs, who filed the case in October last year, said that the company knew that it was ‘woefully unprepared' to meet its goal of manufacturing 5,000 Model 3 cars per week. They added that the company's hype artificially inflated the share price.

US District Judge Charles Breyer said, "federal securities laws do not punish companies for failing to achieve their targets."

Breyer wrote, "Plaintiffs are correct that defendants' qualifications would not have been meaningful if defendants had known that it was impossible for Tesla to meet its stated production goals, not merely highly unlikely. The facts plaintiffs have put forth do not tend to establish that this was the case."

The shareholders now have until the 28th of September to amend their complaint.

Tesla only met its 5,000 cars per week goal in July, partly due to bottleneck issues at its factory. Earlier this year, Elon Musk blamed some of the slowdown on too much reliance on automation, which he told CBS led to a "crazy, complex network of conveyor belts."