On the surface, this looks correct. We should have autonomous cars. Makers should pay damages when they kill people, since the fault shifts from drivers to manufacturers. This should be part of the cost of doing business, and should be factored into the price of both the car and of insurance.
Tesla market cap is nearing a trillion dollars. A typical wrongful death lawsuit is around $1 million in damages. If autonomous cars reach 100% market share, and kill 40,000 people each year (the same as normal cars), that adds $40B each year to the cost of doing business, so O(1/20th) of Tesla's market cap.
If Tesla pays, this would also translate into lower insurance fees as well. Car prices go up slightly, but if safety is similar to human driving, total cost of car ownership remains the same. If autopilot is safer, cost goes down. If humans are safer, costs go up. There's a clear business upside to making safer cars, so Tesla invests there.
In any case, that's not enough to drive Tesla out-of-business, but it is enough to align incentives to make safe self-driving cars.