Exclusive: Tesla faces US criminal investigation over self-driving allegations

October 25 – Three people familiar with the matter say Tesla Inc (TSLA.O) is under criminal investigation in the US over allegations that the company’s electric vehicles can drive themselves.

The U.S. Department of Justice launched a previously undisclosed investigation last year after more than a dozen crashes, some of them fatal, involving Autopilot, Tesla’s driver assistance system, come into play during crashes.

As early as 2016, Tesla’s marketing materials touted Autopilot’s capabilities. In a conference call that year, Elon Musk, CEO of the Silicon Valley automaker, described him as “probably better” than a human driver.

Last week, Musk said in another call that Tesla will soon release an upgraded version of its “Full Self-Driving” software that will allow customers to travel “to your job, to your friend’s house, to the grocery store without touching the steering wheel.”

A video currently on the company’s website states: “The person in the driver’s seat is only there for legal reasons. He does nothing. The car drives itself.”

However, the company has also explicitly warned drivers that they must keep their hands on the wheel and remain in control of their vehicle when using Autopilot.

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.

Such warnings could complicate any case the Justice Department may wish 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 asking for comment. A Justice Department spokesperson declined to comment.

In an interview with Automotive News in 2020, Musk said that Autopilot problems were caused by customers using the system in violation of Tesla’s instructions.

Federal and California safety regulators are already examining whether claims about Autopilot’s capabilities and the system’s design instill a false sense of security in customers, encouraging them to treat Teslas like truly self-driving cars and to remain indifferent behind the wheel with potentially fatal consequences.

People familiar with the investigation said the Justice Department investigation represents a potentially more serious level of scrutiny due to the possibility of filing criminal charges against the company or individual directors.

As part of the latest investigation, sources are examining whether Justice Department prosecutors in Washington and San Francisco misled consumers, investors and regulators by making unsupported claims about the capabilities of Tesla’s driver assist technology.

Authorities conducting the investigation said they would eventually be able to initiate criminal proceedings, seek civil sanctions or close the investigation without taking any action.

One source said the Department of Justice is far from recommending any action, partly because the Autopilot investigation competes with two other DOJ investigations involving Tesla. That source said investigators still have a lot of work to do and that no decision on the charges is imminent.

Sources said the Department of Justice may also face difficulties in forming its case, due to Tesla’s warnings about over-reliance on Autopilot.

For example, after Teslas told an investor call last week that customers will soon be traveling without touching the controls, Musk added that vehicles still need someone in the driver’s seat. “We’re not saying it’s pretty ready to have nobody behind the wheel,” he said.

The Tesla website also warns that before enabling Autopilot, the driver must agree to “keep your hands on the steering wheel at all times” and “remain in control and responsibility of your vehicle” at all times.

Barbara McQuade, a former US attorney who prosecuted auto companies and employees in fraud cases in Detroit and was not involved in the current investigation, said investigators will need to uncover evidence such as emails or other internal communications that show Tesla and Musk made misleading statements. About the knowing abilities of the autopilot.

MANY PROBES

The Criminal Autopilot investigation adds to other investigations and legal issues involving Musk, who was locked in a court battle earlier this year after he waived the $44 billion takeover of social media giant Twitter Inc, but it turns the tide and announces the excitement of the upcoming acquisition.

In August 2021, the US National Highway Traffic Safety Administration launched an investigation into a series of crashes, one of which was fatal, involving Autopilot-equipped Teslas crashing into parked emergency vehicles.

In June, NHTSA officials intensified their investigations involving 830,000 Teslas with Autopilot and identified 16 accidents involving the company’s electric cars and stationary first responder and road maintenance vehicles. The move is a step regulators must take before requesting a recall. The agency did not immediately comment.

In July of this year, the California Department of Motor Vehicles accused Tesla of falsely promoting Autopilot and Full Self-Driving capability to provide autonomous vehicle control. Tesla filed paperwork with the agency to request a hearing on the allegations and stated that he intends to defend against them. The DMV said in a statement that it is currently in the exploratory phase of the proceedings and declined to comment further.

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

Our Standards: Thomson Reuters Trust Principles.

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