Exclusive: Tesla faces U.S. criminal probe over self-driving claims

Oct 25 – Tesla Inc (TSLA.O) is beneath criminal investigation within the United States over claims that the corporate’s electrical autos can drive themselves, three folks acquainted with the matter mentioned.

The U.S. Department of Justice launched the beforehand undisclosed probe final yr following greater than a dozen crashes, a few of them deadly, involving Tesla’s driver help system Autopilot, which was activated throughout the accidents, the folks mentioned.

As early as 2016, Tesla’s advertising and marketing supplies have touted Autopilot’s capabilities. On a convention name that yr, Elon Musk, the Silicon Valley automaker’s chief govt, described it as “probably better” than a human driver.

Last week, Musk mentioned on one other name Tesla would quickly launch an upgraded model of “Full Self-Driving” software program permitting prospects to journey “to your work, your friend’s house, to the grocery store without you touching the wheel.”

A video presently on the corporate’s web site says: “The person in the driver’s seat is only there for legal reasons. He is not doing anything. The car is driving itself.”

However, the corporate additionally has explicitly warned drivers that they have to maintain their fingers on the wheel and keep management of their autos whereas utilizing Autopilot.

The Tesla expertise is designed to help with steering, braking, velocity and lane modifications however its options “do not make the vehicle autonomous,” the corporate says on its web site.

Such warnings may complicate any case the Justice Department would possibly want to deliver, the sources mentioned.

Tesla, which disbanded its media relations division in 2020, didn’t reply to written questions from Reuters on Wednesday. Musk additionally didn’t reply to written questions looking for remark. A Justice Department spokesperson declined to remark.

Musk mentioned in an interview with Automotive News in 2020 that Autopilot issues stem from prospects utilizing the system in methods opposite to Tesla’s directions.

Federal and California security regulators are already scrutinizing whether or not claims about Autopilot’s capabilities and the system’s design imbue prospects with a false sense of safety, inducing them to deal with Teslas as really driverless vehicles and turn out to be complacent behind the wheel with doubtlessly lethal penalties.

The Justice Department investigation doubtlessly represents a extra critical degree of scrutiny due to the opportunity of criminal prices in opposition to the corporate or particular person executives, the folks acquainted with the inquiry mentioned.

As a part of the newest probe, Justice Department prosecutors in Washington and San Francisco are analyzing whether or not Tesla misled shoppers, traders and regulators by making unsupported claims about its driver help expertise’s capabilities, the sources mentioned.

Officials conducting their inquiry may in the end pursue criminal prices, search civil sanctions or shut the probe with out taking any motion, they mentioned.

The Justice Department’s Autopilot probe is much from recommending any motion partly as a result of it’s competing with two different DOJ investigations involving Tesla, one of many sources mentioned. Investigators nonetheless have a lot work to do and no determination on prices is imminent, this supply mentioned.

The Justice Department may additionally face challenges in constructing its case, mentioned the sources, due to Tesla’s warnings about overreliance on Autopilot.

For occasion, after telling the investor name final week that Teslas would quickly journey with out prospects touching controls, Musk added that the autos nonetheless wanted somebody within the driver’s seat. “Like we’re not saying that that’s quite ready to have no one behind the wheel,” he mentioned.

The Tesla web site additionally cautions that, earlier than enabling Autopilot, the driving force first must comply with “keep your hands on the steering wheel at all times” and to all the time “maintain control and responsibility for your vehicle.”

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.

SEVERAL PROBES

The criminal Autopilot investigation adds to the other probes and legal issues involving Musk, who became locked in a court battle earlier this year after abandoning a $44 billion takeover of social media giant Twitter Inc, only to reverse course and proclaim excitement for the looming acquisition.

In August 2021, the U.S. National Highway Traffic Safety Administration opened an investigation into a series of crashes, one of them fatal, involving Teslas equipped with Autopilot slamming into parked emergency vehicles.

NHTSA officials in June intensified their probe, which covers 830,000 Teslas with Autopilot, identifying 16 crashes involving the company’s electric cars and stationary first-responder and road maintenance vehicles. The move is a step that regulators must take before requesting a recall. The agency had no immediate comment.

In July this year, the California Department of Motor Vehicles accused Tesla of falsely advertising its Autopilot and Full Self-Driving capability as providing autonomous vehicle control. Tesla filed paperwork with the agency seeking a hearing on the allegations and indicated it intends to defend against them. The DMV said in a statement it is currently in the discovery stage of the proceeding and declined further comment.

Additional reporting by Hyunjoo Jin and David Shepardson; Editing by Deepa Babington

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