Tesla Under Investigation for Self-Driving Crashes Involving 58 Incidents

Federal regulators have initiated a new investigation into Tesla’s self-driving technology following reports of numerous incidents involving the company’s Full Self-Driving (FSD) feature. The National Highway Traffic Safety Administration (NHTSA) is examining 58 cases where Tesla vehicles allegedly violated traffic laws, including running red lights and driving against traffic. These incidents have led to more than a dozen crashes and nearly two dozen injuries.

The investigation encompasses approximately 2.9 million vehicles, representing nearly all Teslas equipped with the FSD technology, which has drawn criticism for potentially misleading drivers about its capabilities. Analysts express concern over the effectiveness of the software, with Seth Goldstein, an analyst at Morningstar, questioning its reliability. “The ultimate question is, ‘Does the software work?’” he remarked.

As the world’s richest man, Elon Musk has ambitious plans to deploy hundreds of thousands of fully autonomous taxis across the United States by the end of next year. However, the ongoing investigation adds to a series of inquiries into Tesla’s technology that could jeopardize these plans. In the past year, the NHTSA has opened investigations into various aspects of Tesla’s driver-assistance features, including a separate probe into 2.4 million vehicles after multiple crashes in low-visibility conditions, one resulting in a pedestrian fatality.

The latest inquiry follows a jury verdict in Miami earlier this year, which found Tesla partially liable for a deadly crash in Florida involving its Autopilot system. The jury awarded the victims over $240 million in damages, a decision Tesla plans to appeal. This legal backdrop raises questions about Tesla’s commitment to safety and transparency regarding its technology.

In light of these developments, some investors are calling for Tesla to reconsider its terminology surrounding FSD. Ross Gerber, a prominent money manager and long-time investor in Tesla, advocates for a change in the naming convention, suggesting that the term “full self-driving” is misleading. “They have to take responsibility for the fact that the software doesn’t work right and either adjust the hardware accordingly,” he stated, emphasizing the need for enhanced safety measures.

Tesla maintains that it has consistently informed drivers of the limitations of its FSD system, asserting that drivers must remain attentive and ready to intervene at all times. Despite these assurances, reports from drivers involved in accidents indicate that their vehicles provided no warning before unexpected actions occurred.

On the stock market, Tesla shares fell nearly 3% earlier this week, reflecting investor concerns linked to the investigation. The stock closed with a loss of 0.7%. This comes at a challenging time for the company, as it grapples with declining sales partly due to growing discontent among customers regarding Musk’s political affiliations, as well as increasing competition from rival electric vehicle manufacturers, notably BYD from China.

In response to market pressures, Musk announced plans to introduce two new, more affordable versions of existing Tesla models, including the popular Model Y. However, initial investor reactions have been tepid, with shares dropping by 4.5% following the announcement.

As Tesla navigates this complex landscape of regulatory scrutiny and market challenges, the outcome of the NHTSA investigation could significantly impact its future direction and the broader landscape of autonomous vehicle technology.