Investigation Initiated by Department of Justice and SEC Regarding Alleged Deception by Tesla on Autonomous Driving Features

Tesla and Elon Musk have been assuring consumers for almost ten years that their self-driving technologies, such as Autopilot and “Full-Self Driving Beta,” are superior to human drivers and close to total autonomy. Despite Musk’s optimistic forecasts continuously missing their mark, Tesla’s contradictory statements have fostered unwarranted confidence in its driving systems, sometimes resulting in tragic accidents. Finally, federal authorities are challenging Tesla’s claims, investigating whether Tesla’s vehicles truly possess the level of self-driving capabilities the company asserts.

According to sources familiar with the situation, both the Department of Justice and Securities and Exchange Commission are probing Tesla’s representations regarding its autonomous driving technology. The DOJ is examining potential wire fraud accusations for misleading customers by overstating the capabilities of its driving systems. Meanwhile, the SEC is gathering evidence of suspected securities fraud for allegedly deceiving investors, a matter for which Musk has previously received fines.

Autopilot and similar Full Self-Driving features are under scrutiny for the disparity between the publicized capabilities and their actual performance. These Level 2 driving aids are promoted as safer than human drivers, with Tesla implying that keeping an eye on the road is merely a legal formality. Musk has even publicly removed his hands from the steering wheel during a television appearance to showcase the system’s reliability.

However, Tesla’s fine print instructs users to remain vigilant at all times while driving, with hands on the wheel and attention focused on the road. While interacting with regulators, Tesla categorizes its most advanced Full Self-Driving technology as Level 2, a far cry from the near Level 5 autonomy the company suggests it is close to achieving. Despite renaming the Full Self-Driving Beta to Full Self-Driving Supervised recently, no significant functional enhancements have been implemented.

This conflicting messaging has led to misperceptions among the public, leading to numerous accidents and at least 13 fatalities. The National Highway Traffic Safety Administration identified Tesla’s lenient driver monitoring as a common factor in these incidents, resulting in the company’s largest recall in 2023. Regulators are now concerned that Tesla’s ease of reverting to previous software versions without critical updates facilitates continued misuse by misinformed drivers.

The ongoing federal investigations are still in their preliminary stages, with prosecutors collecting information rather than initiating charges. The potential consequences for Tesla and Musk remain uncertain until further developments occur (as Musk was previously penalized $20 million by the SEC). This investigation, concerning a more substantial issue than a mere misleading tweet, may lead Musk to regret the possibility of another $20 million penalty.

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