What We’re Reading

• Tesla shouldn’t call driving system Autopilot because humans are still in control, Buttigieg says (Associated Press, May 11, 2023)

  NHTSA has continued to look closely into safety concerns regarding Tesla’s active driver assistance systems in the past year, announcing multiple recalls and investigations. And, according to recent statements by Transportation Secretary Pete Buttigieg, whose department includes NHTSA, this scrutiny will not be abating anytime soon. Buttigieg appears especially concerned with Tesla’s marketing of Autopilot and Full Self-Driving, which is also under investigation by the Justice Department, saying “I don’t think that something should be called, for example, an Autopilot, when the fine print says you need to have your hands on the wheel and eyes on the road at all times.”

  Buttigieg added that he and the Transportation Department will hold Tesla accountable for complying with federal safety standards, explaining that “[w]e call balls and strikes. ... I view it as something where it’s very important to be very objective. But anytime a company does something wrong or a vehicle needs to be recalled or a design isn’t safe, we’re going to be there.”  No vehicle on sale today can drive itself, Buttigieg stressed, emphasizing that drivers must pay attention at all times when using these driver assistance systems.

• Tesla owners sue over battery software update impact (The Hill, May 12, 2023)

  The latest putative class action filed against Tesla alleges that the manufacturer’s over-the-air updates deplete the vehicles’ batteries—reducing driving range by more than 20 percent—or, in some cases, leaving the batteries completely inoperable. While the issues can be reversed, the cost to do so can run upwards of $15,000 if a new battery is required, according to the complaint filed last week in California federal court.

  The four class representatives, on behalf of themselves and all similarly situated Model S and X owners, assert that “no reasonable consumer would expect that the car manufacturer itself, through an automated system, would deliberately and significantly interfere with the car’s performance through software updates that reduce the operating capacity of the vehicles.” The lawsuit seeks monetary damages as well as injunctive relief to require Tesla to initiate a “recall, free replacement, or vehicle buy-back program” for affected vehicles.

  In a previous suit, Tesla agreed to pay $1.5M to settle claims related to reduced charging speed and range following an update to certain Model S vehicles. 

• Tesla wins big direct sales Supreme court case (Electrek, May 16, 2023)

  Tesla has distinguished itself in the industry in many ways, including through its direct sales model. That model has been challenged by dealerships, whose entire business is at stake, and has been prohibited in several states where franchising laws prohibit automakers from selling directly to consumers. Delaware was among those states until just this week, when the Delaware Supreme Court held that the state’s Franchise Act was enacted to “address the disparity in bargaining power which permitted new motor vehicle manufacturers to exert economic pressure over their franchises. Its definitions exclude Tesla and its direct sales model, where new electric cars are not sold through franchised dealers in Delaware.” The ruling will benefit Tesla as well as other EV manufacturers like Rivian and Lucid, and any others who pursue a direct-to-consumer model.