Tesla (NASDAQ:TSLA) has come under criminal investigation as the U.S. Department of Justice launched a probe over the company’s claims that its electric vehicles can drive themselves.
The DOJ launched the probe after more than a dozen crashes involving the company’s driver assistant system Autopilot, which was activated during the accidents.
The story goes as far back as 2016, when Tesla’s marketing materials indicated the cars could drive themselves. On a conference call, Tesla CEO Elon Musk described it as “probably better” than a human driver. On a quarterly results call, Musk said the company would release an upgrade to its self-driving software. This upgrade would allow customers to travel “to your work, your friend’s house, to the grocery store without you touching the wheel.”
The company, however, has issued a warning to drivers that they still need to maintain full control of their vehicle at all times. The company’s technology is primarily designed to help with steering, braking, speed and lane changes, but these features do not make a vehicle completely autonomous, according to company website.
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Regulatory investigation
Autopilot’s problems are from customers using the system in ways the company didn’t intend, according to Musk in an interview with Automotive News. Federal and California regulators are investigating if claims regarding the program’s capabilities give customers a false sense of security.
“Musk is opening the possibility Tesla will have a more difficult path to approval for FSD given heightened NHTSA (National Highway Traffic Safety Administration) and other scrutiny,” said Craig Irwin, an analyst at Roth Capital.
The DOJ investigation could theoretically present a more serious level of scrutiny. It determines whether or not criminal charges against a company or executives are required. Prosecutors in two states are investigating whether Tesla misled consumers, investors and regulators through unsupported claims regarding the technology.
Tesla’s potential woes include more than just the DOJ. The California Department of Motor Vehicles (DMV) noted on Thursday an ongoing review of the capabilities of Tesla vehicles. The DMV previously stated it was evaluating if Tesla’s self-driving cars require regulatory approval after videos displayed dangerous use of the technology. It had said Tesla’s “full self-driving” beta still required human intervention and didn’t fall under regulations on autonomous vehicles.
