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Tesla Faces Criminal Probe Over Self-Driving Claims

Stock Markets Oct 26, 2022 16:10
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By Michael Elkins

An exclusive story by Reuters reports that American electric vehicle giant, Tesla Inc (NASDAQ:TSLA) is under criminal investigation by the United States over claims that the company’s electric vehicles can drive themselves.

According to people familiar with the matter, the U.S. Department of Justice launched the previously undisclosed probe last year following more than a dozen crashes, some of them fatal, involving Tesla’s driver assistance system Autopilot, which was activated during the accidents.

Musk said in an interview with Automotive News in 2020 that Autopilot problems stem from customers using the system in ways contrary to Tesla’s instructions.

Tesla has explicitly warned consumers in the past that drivers must keep their hands on the wheel and maintain control of their vehicles while using Autopilot. The Tesla technology is designed to assist with steering, braking, speed, and lane changes but its features “do not make the vehicle autonomous,” the company says on its website.

The Tesla website cautions that, before enabling Autopilot, the driver first needs to agree to "keep your hands on the steering wheel at all times" and to always "maintain control and responsibility for your vehicle.”

However, the website also features a video that says: “The person in the driver’s seat is only there for legal reasons. He is not doing anything. The car is driving itself.”

According to sources, as part of the latest probe, Justice Department prosecutors in Washington and San Francisco are examining whether Tesla misled consumers, investors, and regulators by making unsupported claims about its driver assistance technology's capabilities. The department could potentially seek to pursue criminal charges, sanctions, or even choose to close the inquiry without action.

The justice department may face challenges in bringing this case because of warnings by Tesla about overreliance on Autopilot. For instance, after telling the investor call last week that Teslas would soon travel without customers touching controls, Musk added that the vehicles still needed someone in the driver’s seat. “Like we’re not saying that that’s quite ready to have no one behind the wheel,” he said.

Barbara McQuade, a former U.S. attorney in Detroit who prosecuted automotive companies and employees in fraud cases and is not involved in the current probe, said investigators likely would need to uncover evidence such as emails or other internal communications showing that Tesla and Musk made misleading statements about Autopilot’s capabilities on purpose.

Shares of TSLA are up 0.94% near end of day trading on Wednesday.

Tesla Faces Criminal Probe Over Self-Driving Claims
 

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