Elon Musk is facing a federal probe over his comments regarding Tesla’s self-driving technology.
According to a report by Reuters, the Department of Justice (DOJ) is investigating whether Musk’s and Tesla’s claims about their Autopilot and Full Self-Driving (FSD) capabilities could be considered securities fraud or wire fraud.
The subject of the inquiry by The DOJ is the establishment of the fact(s) that Tesla might have lied to its consumers about the self-driving services and distorted the information given to investors.
Tesla’s website clearly states that drivers must take responsibility for steering manually, and previous AutoPilot features required their hands to remain on the wheel even while on autopilot.
However, the Tesla boss has repeatedly said that his electric cars can drive themselves, but the truth is that autonomy is not yet at the level needed for such a technology to be developed.
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DOJ is investigating Tesla for securities and wire fraud
The DOJ began its investigation into Tesla’s self-driving claims in October 2022. In January 2023, Tesla disclosed to its investors that the DOJ had requested information related to FSD and Autopilot.
The investigation is reportedly still in its preliminary stages, partly due to the “voluminous” documentation provided by the EV giant.
During the morning of Wednesday after the investigation news, Tesla saw a 3% stock decline in the stock market.
Musk always vouched for Tesla FSD
Musk, since Tesla came up with the company in the last ten years, has been greatly vocal in supporting the company’s self-driving technology. However, the director’s overly optimistic viewpoints have often been realized. He calls himself the ‘boy who cried FSD’, and during a 2022 earnings call, he again reinforced the fact that a system upgrade would be able to get the consumers to drive “with their legs to their friend’s houses, the store and their workplace without a touch of the wheel!”
In 2020, Musk expressed his confidence to an audience in Shanghai that Tesla would attain “basic functionality for level five autonomy this year,” referencing the SAE’s levels of autonomy. However, as of 2024, Tesla’s technology remains at level 2.
A promotional video from 2016 showed a Tesla vehicle driving with minimal human intervention, with a voiceover stating, “The person in the driver’s seat is only there for legal reasons. He is not doing anything. The car is driving itself.”
Following these kinds of comments, several lawsuits have been directed against Tesla, accusing the company of violating the rights of consumers and a careless approach towards both the customers’ and road safety. In its turn, the SEC checks Tesla on the driving system.
Tesla’s legal woes
Tesla has also faced accusations of false advertising from California’s Department of Motor Vehicles and has been under investigation by the state attorney general’s office for its marketing practices. The National Highway Traffic Safety Administration (NHTSA) has associated Tesla’s Autopilot with over 200 accidents and 29 fatalities and has initiated more than 50 special crash investigations into incidents potentially related to Autopilot.
The NHTSA has set a deadline of July 1 for Tesla to respond to inquiries concerning its December recall of over 2 million electric vehicles due to a software issue with Autopilot.
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In December, Tesla acknowledged that the Autopilot controls “may not be sufficient to prevent driver misuse” and could potentially increase the risk of crashes.
The U.S. Department of Justice and the SEC issued a statement indicating that they “do not comment on the existence or nonexistence of a possible investigation.”