U.S. prosecutors are currently scrutinizing Tesla, examining whether the electric vehicle giant may have committed securities or wire fraud.
Reports indicate that the investigation focuses on potentially misleading statements regarding the self-driving capabilities of its vehicles, which could have deceived investors and consumers alike.
Investigation into Tesla's Autonomous Driving Claims
(Photo : David von Diemar from Unsplash)
The US DOJ is now investigating if Tesla's self-driving claims are connected to wire fraud. The company's previous statements are under review at the time.
Tesla's advanced driver-assistance systems, including Autopilot and Full Self-Driving (FSD), offer significant assistance such as steering, braking, and lane changes. However, these systems do not render the vehicles fully autonomous.
Despite Tesla's warnings that drivers must remain engaged, statements by Tesla and CEO Elon Musk have suggested otherwise, implying full self-driving capabilities.
According to Reuters, this has caught the attention of the Justice Department (DOJ), which is exploring the possibility that the automaker misled consumers about the safety and capabilities of its driver-assistance systems through deceptive interstate communications. Additionally, the investigation includes allegations of securities fraud, concerning potentially misleading investors about the functionalities of these systems.
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Driver-Assistance Technology as Subject of Scrutiny
The Securities and Exchange Commission (SEC) is also examining Tesla's representations of its driver-assistance technologies to investors. This scrutiny comes amid various investigations into multiple crashes involving Tesla's Autopilot, some of which have been fatal. These incidents have already prompted a mass recall initiated by the automaker.
Tesla's promotional materials, including a video stating, "The person in the driver's seat is only there for legal reasons. He is not doing anything. The car is driving itself," have been highlighted in the investigation.
Such claims have been contradicted by internal acknowledgments of the technology's limitations, including a Tesla engineer's admission in court that promotional videos did not accurately represent the capabilities at the time.
Regulatory Challenges and Corporate Optimism
The distinction between optimistic corporate projections and legally actionable false statements is a subtle aspect of this investigation. U.S. courts have historically differentiated between permissible corporate optimism and materially false statements that could constitute fraud.
Prosecutors will need to demonstrate that Tesla's claims significantly misled consumers or investors, potentially causing harm.
Electrek, in another report, wrote that late last year, Tesla received subpoenas from the DOJ about its Autopilot feature in EVs.
Consumer Safety and Company Accountability
Instances where Tesla vehicles, operating under Autopilot, were involved in accidents have prompted regulatory bodies to question the adequacy of Tesla's safety measures and the clarity of its communication to consumers.
Electrek, in another report, wrote that late last year, Tesla received subpoenas from the DOJ about its Autopilot feature in EVs.
As this investigation progresses, Tesla faces the challenge of defending its promotional strategies while addressing the safety implications of its technology.
Aside from these issues, Tesla is also being probed by NHTSA. The agency ordered the car manufacturer to submit information regarding the Autopilot recall that took place in December.
At this point, Tesla should have provided the data in the case by July. If it fails to comply with the request, the company will be slapped with a $135.8 million punishment.
Elsewhere, Tesla was also plagued with layoffs, most recently the employees working in the software, engineering, and services divisions.
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