A jury has ruled that Tesla is partly to blame for the death of a young woman who was hit by an electric car on Autopilot.
Naibel Benavides was stargazing at the time of the collision, which sent her flying 22m (75ft) through the air in Florida.
Her boyfriend was seriously injured in the 2019 incident, while her body was discovered in a wooded area.
The company has now been ordered to pay $243m (£183m) in damages to Ms Benavides’ family, and to her partner Dillon Angulo.
Jurors concluded that not all of the blame could be put on a reckless driver who admitted he was distracted by his phone before he hit the young couple.
The motorist, George McGee, reached a separate settlement with the victims’ families in an earlier case.
Brett Schreiber, who represented the victims, said: “Tesla designed Autopilot only for controlled-access highways yet deliberately chose not to restrict drivers from using it elsewhere, alongside Elon Musk telling the world Autopilot drove better than humans.
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“Today’s verdict represents justice for Naibel’s tragic death and Dillon’s lifelong injuries.”
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Tesla – and Elon Musk – have said it will appeal the verdict, labelling it “wrong” and a setback for automotive safety.
The verdict would also work to “jeopardise Tesla’s and the entire industry’s efforts to develop and implement life-saving technology”, the company warmed.
Tesla had claimed Mr McGee was solely to blame for the fatal crash because he had reached down to pick up a dropped mobile phone as his Model S sped through an intersection in Key Largo, Florida, at about 62mph.
Mr McGee allegedly did not receive alerts as he ran a stop sign and a red light – and the plaintiffs’ lawyer argued that the driver’s assistance should have warned the driver and braked before the collision.
The collision sent Ms Benavides Leon flying 22m (75ft) through the air, with her body later being discovered in a wooded area, while Mr Angulo suffered serious injuries.
“To be clear, no car in 2019, and none today, would have prevented this crash,” Tesla said. “This was never about Autopilot; it was a fiction concocted by plaintiffs’ lawyers blaming the car when the driver – from day one – admitted and accepted responsibility.”
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Lawyers for the plaintiffs also alleged that Tesla either hid or lost key evidence, including data and video recorded seconds before the collision.
They showed the court that the company had the evidence all along, despite repeated denials, after hiring a forensic data expert who dug it up.
After being shown the evidence, Tesla said it made a mistake and honestly hadn’t thought it was there.
Past cases against Tesla were dismissed or settled, so the verdict in this case could encourage more legal action.
Miguel Custodio, a car crash lawyer not involved in this trial, added: “This will open the floodgates. It will embolden a lot of people to come to court.”
The verdict comes as Mr Musk plans to roll out a driverless taxi service, hoping to convince people his vehicles are safe enough to drive on their own.
Improvements to the company’s driver assistance and partial self-driving features have been made in recent years – but in 2023, 2.3 million Tesla vehicles were recalled amid fears Autopilot was failing to sufficiently alert drivers not paying attention to the road.
