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 vehicles can drive themselves, three people familiar with the matter said.

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

As early as 2016, Tesla’s marketing materials touted Autopilot’s capabilities. At a conference that year, Elon Musk, the chief executive of the Silicon Valley automaker, described it as “probably better” than a human driver.

Last week, Musk said on another call that Tesla would soon release an updated version of “Full Self-Driving” software that would allow customers “to travel to your work, your friend’s house, the grocery store without you having to ‘wheel touched.”

A video currently on the company’s website says: “The person 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 explicitly warned drivers to keep their hands on the wheel and maintain control of their vehicles while using Autopilot.

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

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Such warnings could complicate any case the Justice Department might 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 Justice Department spokesman 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 lull customers into a false sense of security, inducing them to treat Teslas as truly driverless cars and get 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, 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 its driver assistance technology capabilities, the sources said.

Officials conducting their investigation could eventually pursue criminal charges, seek civil penalties or close the investigation without doing anything, they said.

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The Justice Department’s Autopilot probe is far from recommending action in part because it is competing 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 the investor said last week that Teslas will soon travel without customers touching the controls, Musk added that the vehicles still need someone in the driver’s seat. “Like we’re not saying that’s quite ready to have no one behind the wheel,” he said.

Tesla’s website also warns that, before activating 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 vehicle.”

Barbara McQuade, a former U.S. attorney in Detroit who has prosecuted auto companies and employees in fraud cases and is not involved in the current investigation, said investigators are likely to uncover evidence such as emails or other internal communications that show that Tesla and Musk made false statements. about autopilot’s capabilities on purpose.

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Various probes

The criminal Autopilot investigation adds to the other probes and legal issues involving Musk, who was locked in a court battle earlier this year after he abandoned a $44 billion takeover of social media giant Twitter Inc, only to reverse course and the excitement to proclaim 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, involving Teslas equipped with Autopilot crashing into parked emergency vehicles.

NHTSA officials in June stepped up their probe, which covers 830,000 Teslas with Autopilot, identifying 16 accidents involving the company’s electric cars and stationary first-responder and road maintenance vehicles. The move is a step regulators must take before requesting a recall. The agency had no immediate comment.

In July this year, the California Department of Motor Vehicles accused Tesla of falsely advertising its Autopilot and Full Self-Driving capability as autonomous vehicle control. Tesla has filed documents with the agency seeking a hearing on the allegations and has indicated it intends to defend against them. The DMV said in a statement that it is currently in the discovery stage of the lawsuit and declined further comment.

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