WASHINGTON — State attorneys and securities regulators are investigating whether Tesla Inc. TSLA 0.20% misled consumers and investors about the performance of its advanced driver assistance system, according to a person familiar with the matter.
The Justice Department is reviewing statements made by Tesla and its executives about the safety and functionality of the system known as Autopilot, the person said. The Securities and Exchange Commission is conducting a similar civil investigation, people familiar with the matter said.
Tesla did not respond to requests for comment.
The company’s autopilot system is one of the best-known advanced driver assistance systems and is standard on new Teslas. The technology helps drivers with tasks like steering and maintaining a safe distance from other vehicles on the highway, but it doesn’t make cars autonomous.
The US Department of Motor Vehicle Safety and the California Department of Motor Vehicles have also stepped up their autopilot review.
Tesla urges drivers using Autopilot to pay attention to the road and keep their hands on the wheel, but the company’s public messages at times seemed inconsistent with that guidance. Some, including California’s DMV, have said the language Tesla uses to describe its technology risks giving drivers an overblown impression of its capabilities.
Tesla CEO Elon Musk said data gathered so far from a fatal crash in Houston showed the car’s autopilot system was “not engaged.” Local authorities said they believe the Tesla Model S was operating with no one in the driver’s seat when it crashed into a tree. Photo: Scott J Engle/Portal
Authorities in Washington and San Francisco are involved in the Justice Department’s criminal investigation, the person said. The SEC has the power to civilly enforce investor protection laws.
The SEC’s investigation was previously unreported. Portal previously reported on the Justice Department’s criminal investigation.
A Justice Department spokeswoman and an SEC spokeswoman declined to comment.
The National Highway Traffic Safety Administration, the federal agency responsible for auto safety, launched an investigation into Autopilot last year after a series of accidents involving Teslas and first responder vehicles stopped at emergency spots. The agency recently escalated this investigation. This summer, California’s DMV accused Tesla of falsely advertising its vehicles as autonomous. Tesla has requested to be heard on the matter, records show.
Tesla has said that driving with Autopilot on is safer than without. The company points to internal data showing that accidents are less common when drivers use Autopilot, although some researchers have criticized Tesla’s methodology.
Subscribe to Newsletter
Alert Technology
Important news in the technology sector.
The SEC and the Justice Department have a long history of investigating Tesla and its CEO, Elon Musk. Tesla settled an investigation in 2018 alleging that Mr Musk misled shareholders — through statements he wrote on Twitter — about his ability and plans to take the company private for $420 a share.
Tesla and Mr. Musk settled the claims by paying $20 million each, and Mr. Musk was forced to step down as chairman of the company. He also agreed to have company lawyers pre-approve all of his tweets related to material information such as Tesla’s new products, performance, projections, and potential acquisitions or mergers.
Tesla said in securities filings that federal prosecutors also investigated Mr Musk’s take-private tweets and company statements about production rates for its Model 3 vehicle. Prosecutors have not sought further information on these issues since Tesla last provided records in May 2019, the company said.
The SEC has also investigated Mr. Musk for his late disclosure of his personal interest in Twitter Inc., TWTR 0.66%, as well as Mr. Musk’s and his brother Kimbal Musk’s sales of Tesla stock around the time Mr Musk quizzed Twitter about giving up 10% of his stake in the electric carmaker.
write to Dave Michaels at [email protected] and Rebecca Elliott at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the October 28, 2022 print edition as US Probes Tesla Statements on Autopilot.