What We’re Reading
In Tesla Autopilot probe, US prosecutors focus on securities, wire fraud (Reuters, May 8, 2024)
Reuters reported this morning that prosecutors are investigating whether Tesla committed securities fraud by deceiving investors or wire fraud by deceiving consumers about its driver-assistance features. Despite the name “Full Self-Driving,” Tesla’s driving assistance feature is not fully autonomous, and Tesla warns drivers to be prepared to take over driving at any moment. However, Elon Musk has been promoting the “prowess of Tesla’s driver-assistance technology for nearly a decade.” This probe could potentially result in criminal charges or civil sanctions, but Tesla has produced “voluminous documents” in response to subpoenas, and prosecutors are not close to coming to any kind of decision on how to proceed.
US seeks information from Tesla on how it developed and verified whether Autopilot recall worked (WEAU News, May 7, 2024)
NHTSA is seeking detailed information from Tesla regarding its December recall of over 2 million vehicles equipped with Autopilot. Concerns have arisen about the effectiveness of the recall, with Tesla reporting 20 crashes post-remedy. The focus is on whether Autopilot should operate beyond limited access highways, leading to increased driver warnings on roads with intersections. The agency is scrutinizing Tesla's response to driver confusion and enhancement of safety features post-recall, while considering further actions if necessary to ensure Autopilot’s safe functioning.
“As clunky as our government is, the feedback loop is working,” said Missy Cummings a professor of engineering and computing at George Mason University who studies automated vehicles. “I think the NHTSA leadership is convinced now that this is a problem,” Cummings added. Phil Koopman, a professor at Carnegie Mellon University who studies automated driving safety, stated that “NHTSA has to respond forcefully or other car companies will start pushing out inadequate remedies.”
Tesla (TSLA) launches another round of layoffs (Electrek, May 6, 2024)
Tesla has launched its fourth round of layoffs in only four weeks after the company’s announcement that it would be laying off around 10% of its workforce. However, it appears that number may be closer to 20% after the most recent round of layoffs occurred this past weekend. Elon Musk has stated the layoffs are largely due to role duplication and hiring inefficiencies, while also telling investors that the layoffs occurred for “restructuring for the next phase of growth.” These layoffs also are occurring after Tesla’s weakest financial performance due to low vehicle sales and deliveries.