Exclusive: Tesla faces US criminal case over self-driving claims


Oct 25 – Tesla Inc ( TSLA.O ) is under criminal investigation in the United States over claims that the company’s electric cars can drive themselves, three people familiar with the matter said.

The U.S. Justice Department launched a previously undisclosed investigation last year after more than a dozen crashes involving Tesla’s driver-assistance system, Autopilot, some of which were fatal, the people said.

Back in 2016, Tesla’s marketing materials touted Autopilot’s capabilities. At a conference that year, Silicon Valley automaker CEO Elon Musk called it “probably better” than a human driver.

Last week, Musk said in another call that Tesla would soon introduce an improved version of its “Full Self-Driving” program that would allow customers to travel “to work, to a friend’s house, to the grocery store without touching the wheel.”

The video, now posted on the company’s website, reads: “The person in the driver’s seat is only there for legal reasons. It does nothing. The car drives itself.”

However, the company also clearly warned drivers that they should keep their hands on the wheel and control their vehicles while using Autopilot.

Tesla’s technology is designed to assist with steering, braking, acceleration and lane changes, but its features “do not make the car autonomous,” the company says on its website.

Such warnings could complicate any case the Justice Department wants to bring, the sources said.

Tesla, which disbanded its media relations department in 2020, did not respond to written questions from Reuters on Wednesday. Musk also did not respond to written questions seeking comment. A spokesman for the Ministry of Justice declined to comment.

In a 2020 interview with Automotive News, Musk said Autopilot problems stemmed from customers using the system against Tesla’s instructions.

Federal and California safety regulators are already investigating whether claims about Autopilot’s capabilities and the system’s design may have lulled customers into a false sense of security, led them to view Teslas as truly self-driving cars and become confident behind the wheel, with potentially deadly consequences.

The Justice Department probe represents a potentially more serious level of scrutiny than the possibility of criminal charges against the company or individual executives, people familiar with the inquiry said.

As part of the latest probe, Justice Department prosecutors in Washington and San Francisco are investigating whether Tesla misled consumers, investors and regulators by making unsupported claims about the capabilities of its driver-assistance technology, the sources said.

They said investigating officers could ultimately file criminal charges, seek civil sanctions or close an investigation without taking any action.

The Justice Department’s Autopilot investigation is far from recommending any action, in part because it competes with two other DOJ investigations involving Tesla, one of the sources said. Investigators still have a lot of work to do and no decision on charges is imminent, the source said.

The Justice Department may also have trouble making its case, the sources said, because it has concerns about Tesla’s over-reliance on Autopilot.

For example, after announcing on an investor call last week that Teslas will soon travel without customers touching the controls, Musk added that vehicles still need someone in the driver’s seat. “It’s like we’re not saying it’s ready enough to have no one at the wheel,” he said.

Tesla’s website also warns that before engaging Autopilot, the driver must first agree to “keep your hands on the wheel at all times” and “retain control and responsibility for your vehicle” at all times.

Barbara McQuade, a former U.S. attorney in Detroit who prosecutes auto companies and their employees in fraud cases and is not involved in the current investigation, said investigators would have to uncover evidence such as emails or other internal communications that show Tesla and Musk made false statements. About the purposeful capabilities of the autopilot.

A FEW PROBES

The criminal Autopilot probe adds to other investigations and legal matters involving Musk, who was locked in a court battle earlier this year after he rejected a $44 billion takeover of social media giant Twitter Inc., only to reverse course and announce an impending takeover frenzy.

In August 2021, the U.S. National Highway Traffic Safety Administration opened an investigation into a series of crashes in which a Tesla equipped with Autopilot crashed into parked emergency vehicles.

In June, NHTSA officials ramped up their investigation into 830,000 Teslas with Autopilot, identifying 16 accidents involving the company’s electric vehicles and stationary first responder and road maintenance vehicles. The move is one step regulators must take before they can demand a recall. The agency did not immediately comment.

In July of this year, the California Department of Motor Vehicles accused Tesla of falsely advertising Autopilot and fully self-driving capabilities as providing autonomous driving. Tesla has filed documents with the agency to hold a hearing on the claims and has indicated that it intends to defend against them. The DMV said in a statement that the process is currently in the discovery phase and declined to comment further.

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

Our standards: Thomson Reuters Trust Principles.



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