Tesla faces U.S. criminal probe over self-driving claims, sources say

Tesla is under criminal investigation in the United States over claims that the company’s electric cars can drive themselves, three people familiar with the matter said.

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

As early as 2016, Tesla’s marketing materials touted Autopilot’s capabilities. In a conference call that year, Elon Musk, Silicon Valley’s chief car executive, described it 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 allows customers to travel “to your work, your friend’s house, to at the grocery store without touching the wheel.”

A video now on the company’s website says: “The man in the driver’s seat is only there for legal reasons. He’s not doing anything. The car is driving itself.”

However, the company also clearly warns drivers that they should keep their hands on the wheel and maintain control of their vehicles while using Autopilot.

Tesla’s technology is designed to assist with steering, braking, speed and lane changes but its features “will not make the car autonomous,” the company says on its website.

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Such warnings could complicate any case the Justice Department wants 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 seeking comment. A spokeswoman for the Justice Department declined to comment.

Musk said in an interview with Automotive News in 2020 that problems with Autopilot 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 lull customers into a false sense of security, prompting them to treat Teslas which are truly driverless cars and can be complacent behind the wheel with potentially fatal consequences.

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

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

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

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The Justice Department’s Autopilot probe is far from recommending any action 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, this source said.

The Justice Department may also face challenges in building its case, the sources said, because of Tesla’s warnings about over-reliance on Autopilot.

For example, after telling the investor call last week that Teslas will soon travel without customers touching the controls, Musk added that the vehicles still need a person in the driver’s seat. “Like we’re not saying that’s ready without anybody behind the wheel,” he said.

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

Barbara McQuade, a former U.S. attorney in Detroit who has prosecuted automotive companies and employees in fraud cases and is not involved in the current probe, said investigators will likely need to uncover evidence such as in emails or other internal communications indicating that Tesla and Musk made misleading statements. about Autopilot capabilities on purpose.

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Many Probes

The Autopilot criminal investigation adds to other probes and legal issues involving Musk, who was locked in a court battle earlier this year after abandoning a $44 billion takeover of the social media giant. Twitter Inc, only to reverse course and express excitement for the upcoming acquisition.

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

NHTSA officials in June stepped up their investigation, which covered 830,000 Teslas with Autopilot, identifying 16 crashes involving the company’s electric cars and stopping first-responders and vehicle to continue on the road. The move is one 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 advertising Autopilot and Full Self-Driving capabilities as providing autonomous vehicle control. Tesla has filed papers with the agency seeking a hearing on the allegations and indicating it intends to defend them. The DMV said in a statement that it is currently in the discovery phase of the proceeding and declined further comment.

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