Oct 25 – Tesla Inc ( TSLA.O ) is under criminal investigation in the United States over claims that the company’s electric vehicles can drive themselves, three people familiar with the matter said.
The U.S. Justice Department launched the previously undisclosed probe last year after more than a dozen crashes, some of them fatal, involving Tesla̵[ads1]7;s Autopilot driver assistance system, which was activated during the crashes, the people said.
As early as 2016, Tesla’s marketing materials have discussed Autopilot’s capabilities. In a conference call that year, Elon Musk, the Silicon Valley automaker’s CEO, described it as “probably better” than a human driver.
Last week, Musk said on another call that Tesla will soon release an upgraded version of “Full Self-Driving” software that will allow customers to travel “to your job, your friend’s house, to the grocery store without you touching the wheel.”
A video currently on the company’s website says: “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.
The Tesla technology is designed to assist with steering, braking, speeding and lane changes, but the features “do not make the vehicle autonomous,” the company says on its website.
Such warnings could complicate any case the Justice Department might want to bring, the sources said.
Tesla, which disbanded its media division in 2020, did not respond to written questions from Reuters on Wednesday. Musk also did not respond to written questions seeking comment. A spokesperson for the Ministry of Justice declined to comment.
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.
Federal and California safety regulators are already investigating whether claims about Autopilot’s capabilities and the system’s design are giving customers a false sense of security, causing them to treat Teslas as truly driverless cars and become complacent behind the wheel with potentially deadly consequences.
The Justice Department investigation potentially represents a more serious level of scrutiny because of the possibility of criminal charges against the company or individual executives, the people familiar with the investigation said.
As part of the latest investigation, 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 the driver-assistance technology, the sources said.
Officials conducting the investigation could ultimately pursue criminal charges, seek civil penalties or close the investigation without taking any action, they said.
The Justice Department’s Autopilot probe 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, this source said.
The Justice Department may also face challenges in building its case, the sources said, because of Tesla’s warnings about overreliance on Autopilot.
For example, after telling the investor call last week that Teslas would soon travel without customers touching the controls, Musk added that the vehicles still needed someone in the driver’s seat. “Like we’re not saying it’s all clear to have no one behind the wheel,” he said.
The Tesla website also warns that before activating Autopilot, the driver must first agree to “keep your hands on the wheel at all times” and to always “maintain control and responsibility for your vehicle.”
Barbara McQuade, a former U.S. attorney in Detroit who prosecuted auto companies and employees in fraud cases and is not involved in the current investigation, said investigators will likely need to unearth evidence such as emails or other internal communications that show Tesla and Musk came up with intentionally misleading statements about the autopilot’s capabilities.
The criminal Autopilot investigation adds to the other probes and legal questions involving Musk, who was locked in a legal battle earlier this year after abandoning a $44 billion takeover of social media giant Twitter Inc, only to reverse course and proclaim tension for the impending acquisition.
In August 2021, the US National Highway Traffic Safety Administration opened an investigation into a series of accidents, one of them fatal, in which Teslas equipped with Autopilot hit parked emergency vehicles.
NHTSA officials in June intensified their investigation, which covers 830,000 Teslas with Autopilot, and identified 16 crashes involving the company’s electric cars and stationary first-responder and road maintenance vehicles. The move is a step regulators must take before calling for 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 capabilities that provide autonomous vehicle control. Tesla filed papers with the agency seeking a hearing on the allegations and indicated it intended to defend itself against them. The DMV said in a statement that it is currently in the discovery phase of the proceeding and declined further comment.
Additional reporting by Hyunjoo Jin and David Shepardson; Editing by Deepa Babington
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