What We’re Reading

• Elon Musk overstated Tesla’s autopilot and self-driving tech, new lawsuit says (The Guardian, February 27, 2023)

  Another putative class action lawsuit has been filed against Tesla and members of its C-suite team in a California federal court.  The latest complaint was filed by shareholder Thomas Lamontagne, on behalf of himself and similarly situated shareholders, alleging that Tesla’s false and misleading marketing of its Autopilot and FSD technologies caused a “precipitous decline in the market value of the company’s common stock.” Lamontagne seeks an unspecified amount of damages for himself and the class.

  Tesla’s market performance has been under scrutiny for months.  As recently as February 16, the OEMs share price fell 5.7% “after NHTSA forced a recall of more than 362,000 Tesla vehicles equipped with full self-driving beta software because they could be unsafe around intersections.”

  The full complaint can be accessed here. The case is Lamontagne v. Tesla, Inc., et al., Case No. 23-cv-00869, United States District Court for the Northern District of California.

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We think this case will be particularly interesting to watch, as Tesla will be unable to compel it to arbitration, unlike some of the other marketing cases brought by owners whose claims arguably are subject to arbitration pursuant to language in their purchase agreements.

• Americans still aren’t sold on electric cars (Business Insider, February 27, 2023)

  As seemingly every major automaker has gone all in on EVs during the peak of the hype cycle, consumers may be signaling the onset of the trough of disillusionment—at least according to a recent study from Deloitte, which revealed that less than one-third of US car buyers feel the need to electrify their next vehicle purchase. Instead, the study reflected that 63% of prospective US car purchasers plan to stick with an ICE vehicle. By comparison, 48% of European consumers surveyed said they will electrify their next purchase.

  These numbers are not good news for automakers who reportedly plan to spend at least $1.2 trillion to electrify their fleets by 2030. The cause of this possible slowdown in adoption is complex and includes high EV costs, lagging charging infrastructure, range anxiety, and recent declines in ICE vehicle prices.

  Another interesting factor influencing US consumers’ decision to electrify is automakers’ plan for battery recycling and reuse. The article notes that, without a concrete plan for recycling, some consumers are holding off on EV purchases. Car buyers also appear to be placing importance on resale value before going electric. 

  According to the study, “61% of buyers are either very or somewhat concerned about an EV’s resale value, compared to 55% that are very or somewhat concerned about a gas-powered vehicle's resale value.” Concern over EV resale value is “likely due to rapidly evolving EV and battery technologies,” according to Deloitte’s report, which is creating more perceived risk exposure in purchasing a vehicle that quickly becomes technologically inferior or obsolete.

• Federal Policy Framework for Our AV Future (AVIA, March 1, 2023)

  The Autonomous Vehicle Industry Association has released a twelve-page recommendation for federal policymaking “to maximize the deployment of safe autonomous technology in the United States.” According to the industry group, federal legislation should be enacted that, among other things:

  • Supports U.S. innovation;

  • Takes into account all vehicle types, including commercial vehicles;

  • Reforms and expands the process by which OEMs can seek design exemptions (e.g., applications to remove steering wheels);

  • Expands eligibility for testing and evaluation under the FAST Act;

  • Directs NHTSA to modernize the FMVSS;

  • Revises “make-inoperative” provisions of the Motor Vehicle Safety Act to allow for disabling manual controls during autonomous operation for safety reasons;

  • Makes clear that the Federal Motor Carrier Safety Regulations do not require a human driver in L4 operations;

  • Expands access;

  • Preserves federal regulatory oversight of vehicle design and performance;

  • Protects confidential information of OEMs;

  • Promotes safety.