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

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

The US Department of Justice last year launched an undisclosed investigation into more than a dozen crashes, some of them fatal, involving Tesla’s Autopilot driver assistance system, which was activated during crashes, the sources said.

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

Musk said in another call last week that Tesla would soon release an improved version of “Full Self-Driving” software that allows customers to drive “to your job, to your friend’s house, to the grocery store without you touch the wheel”.

A video currently on the company’s website reads: “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 to keep their hands on the wheel and maintain control of their vehicles while using Autopilot.

Tesla technology is designed to help with steering, braking, speed and lane changes, but its features “do not make the vehicle self-driving,” the company says on its website.

Such warnings could complicate any case the Justice Department might wish to pursue, 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 Justice Department spokesperson declined to comment.

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

Federal and California safety regulators are already examining whether claims about Autopilot capabilities and system design are giving customers a false sense of security, prompting them to treat Teslas like true driverless cars and become complacent behind the wheel. with potentially fatal consequences.

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

In the latest investigation, Justice Department prosecutors in Washington and San Francisco are examining whether Tesla misled consumers, investors and regulators by making unsubstantiated claims about its assistive technology’s abilities to driving, the sources said.

Officials conducting their investigation could ultimately pursue criminal charges, seek civil penalties or terminate the investigation without taking any action, they said.

The Justice Department’s Autopilot investigation falls far short of recommending 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 the charges is imminent, the source said.

The Justice Department could also face difficulties building its case, the sources said, due to Tesla’s warnings about an overreliance on Autopilot.

For example, after telling the investor call last week that Teslas would soon be traveling without customers touching controls, Musk added that the vehicles still needed someone behind the wheel. “Like we’re not saying it’s quite ready to have no one behind the wheel,” he said.

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

Barbara McQuade, a former US attorney in Detroit who has prosecuted auto companies and employees in fraud cases and is not involved in the current investigation, said investigators would likely need to uncover evidence such as emails or other internal communications showing that Tesla and Musk made misleading claims. on the capabilities of the autopilot on purpose.

SEVERAL PROBES

The Autopilot criminal probe adds to other investigations and legal issues involving Musk, who found himself locked in a court battle earlier this year after he abandoned a $44 billion takeover of the media giant. social Twitter Inc, to turn the tide and proclaim enthusiasm for the impending acquisition.

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

In June, NHTSA officials stepped up their investigation, which covers 830,000 Teslas with Autopilot, identifying 16 crashes involving the company’s electric cars and stationary first aid and road maintenance vehicles. This decision is a step that regulators must take before requesting a recall. The agency had no immediate comment.

In July of 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 documents with the agency requesting a hearing into the allegations and said it intended to defend against them. The DMV said in a statement that it is currently in the discovery stage of the procedure and declined to comment further.

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

Our standards: The Thomson Reuters Trust Principles.

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