U.S. prosecutors are investigating whether Tesla committed securities and wire fraud by misleading investors and consumers about its electric cars’ self-driving features, three people familiar with the matter told Reuters. are doing.
Tesla’s Autopilot and fully self-driving systems help with steering, braking, and lane changes, but they are not fully self-driving.
Tesla warns drivers to be ready to take over, while Justice Department investigates other statements made by Tesla and CEO Elon Musk that hinted its cars could drive themselves are doing.
U.S. regulators have independently investigated hundreds of crashes, including fatalities, that occurred in Teslas with Autopilot engaged, leading to mass recalls by the automaker.
Reuters exclusively reported on the U.S. criminal investigation into Tesla in October 2022, but now reports for the first time on the specific criminal charges being investigated by federal prosecutors.
Investigators are looking into whether Tesla committed wire fraud by misleading consumers about driver-assistance systems and defrauding interstate carriers, sources said.
The company is also investigating whether Tesla committed securities fraud to defraud investors, two people familiar with the matter said.
The Securities and Exchange Commission is also looking into Tesla’s representations to investors about driver-assistance systems, one of the people said.
The SEC declined to comment.
Tesla did not respond to a request for comment.
Last October, the company disclosed in a filing that the Justice Department had asked it for information about Autopilot and fully autonomous driving.
The Justice Department declined to comment.
The investigation does not prove any wrongdoing, but could result in criminal charges, civil sanctions, or no action at all.
One of the people said prosecutors have not yet reached the stage of deciding how to proceed, in part because they are scrutinizing the vast amount of documents Tesla has submitted in response to the subpoena.
Reuters was unable to determine whether the specific statements being reviewed by prosecutors were potentially illegal. For nearly a decade, Musk has aggressively touted the superiority of Tesla’s driver-assistance technology.
Tesla video demonstrating remaining technology archived Moreover Website “The person in the driver’s seat is only there for legal reasons. He’s not doing anything. The car drives itself.”
Tesla engineers filed suit in 2022 over fatal crash involving Autopilot He testified that he did not describe it.
Still, Musk posted a video on social media in which he wrote, “Tesla will drive itself (without any human intervention) from the city to the freeway and find a parking spot.”
In a 2016 conference call with reporters, Musk said Autopilot is “probably better” than a human driver.
In an October 2022 call, Musk mentioned the upcoming FSD upgrade, saying it would allow customers to “go to work, to a friend’s house, to the grocery store without touching the steering wheel.”
Musk has increased his focus on self-driving technology as Tesla’s car sales and profits have slumped.
Tesla recently shelved plans for a long-awaited $25,000 model that was expected to cut costs and boost sales growth through mass layoffs.
“Pushing against the wall for autonomy is a visible and obvious move,” the billionaire executive posted on his social media platform X in mid-April.
Tesla shares have fallen more than 28% since the beginning of the year, but soared in late April when Musk visited China and made progress toward approval of the FSD sale in that country.
For nearly a decade, Musk has repeatedly promised to make a self-driving Tesla a reality.
“Failure to realize long-term, ambitious goals is not enough to constitute fraud,” Tesla’s lawyers said in a 2022 court filing.
legal challenge
Prosecutors scrutinizing Tesla’s self-driving car claims are aware of the legal hurdles they face and are proceeding with caution, according to people familiar with the investigation.
Three legal experts not involved in the investigation told Reuters that Tesla’s claims range from legitimate salesmanship to materially and deliberately false claims that illegally harm consumers and investors. It is said that it is necessary to prove that the statement crossed the line.
U.S. courts have previously ruled that “arrogance” or “corporate optimism” in product claims does not constitute fraud.
In 2008, a federal appeals court ruled that a company’s optimistic statements alone do not prove that company executives intentionally misled investors.
Daniel Richman, a professor at Columbia Law School and a former federal prosecutor, said Justice Department officials may seek internal Tesla communications as evidence that Musk and others knew they were making false statements. Said it was expensive.
That’s a challenge, but the safety risks associated with overselling self-driving systems “say a lot about how seriously prosecutors, judges and juries will take statements,” Richman said.
fatal crash
Tesla’s claims about Autopilot and FSD have also come under scrutiny from regulatory investigations and lawsuits.
Safety regulators and courts have expressed concern in recent months that company messages about the technology, including brand names like Autopilot and fully self-driving, are lulling customers into a false sense of security.
In April, the Washington State Patrol arrested a man on suspicion of vehicular homicide after a Tesla with Autopilot activated struck and killed a motorcyclist, according to police records.
Troopers said in a probable cause statement that the driver “admitted to being negligent while driving in Autopilot mode…trusting the machine to drive for him.” listed.
In Washington state, drivers remain “responsible for the safe and lawful operation of their vehicles,” regardless of their technical ability, a State Patrol spokesperson told Reuters.
That same month, the National Highway Traffic Safety Administration launched an investigation into whether safety issues with Autopilot were properly addressed when more than 2 million Tesla cars were recalled in December.
NHTSA declined to comment.
The recall comes after regulators began a lengthy investigation after vehicles with Autopilot activated repeatedly collided with vehicles at emergency scenes.
Regulators have since investigated hundreds of crashes in which Autopilot was activated and identified 14 deaths and 54 injuries.
Tesla disputed the NHTSA’s findings but agreed to the recall, which included an over-the-air software update intended to warn inattentive drivers.
NHTSA’s review found a significant safety gap between “drivers’ expectations” of Tesla’s technology and “the system’s true capabilities,” according to NHTSA records. “This gap led to foreseeable misuse and avoidable crashes.”
