The US government is widening their inquiries into Tesla beyond their semi-automated driving technology and has now issued subpoenas for information rather than just requesting it, as stated by the company on Monday.
In its quarterly filing with the Securities and Exchange Commission, Tesla disclosed that the Department of Justice is conducting an investigation into potential personal perks, connections to other parties, vehicle capabilities, and employment choices. However, specific information was not provided.
According to legal experts, the inclusion of new investigation subjects and the issuance of subpoenas indicate that prosecutors are expanding their investigation and have deemed it necessary to compel Tesla to reveal information. The filing suggests that prosecutors may also be looking into the actions of Tesla’s CEO, Elon Musk, and whether the company has accurately disclosed details about its vehicles.
In January, Tesla announced that the Justice Department had asked for paperwork pertaining to its Autopilot and “Full Self-Driving” capabilities. These features are considered to be driver-assist systems and the company states on its website that the vehicles are not capable of fully self-driving.
The company has revealed an investigation that goes beyond just examining the Autopilot and FSD functions, according to Erik Gordon, a business and law professor at the University of Michigan. He also noted that the DOJ typically begins with a written request and may issue administrative subpoenas if they feel they are not receiving full cooperation.
Gordon stated that Tesla’s legal team deemed the items under investigation to be significant enough to prompt revisions to the company’s public disclosures.
Tesla did not reply to a comment request, however, the Austin-based company stated in their SEC filing that as far as they know, no government entity has determined any wrongdoing in any ongoing investigation. The Department of Justice declined to provide a comment.
In its filing, Tesla stated that the ongoing investigations could harm the company’s reputation. The company expressed concern that if the government takes legal action, it could significantly impact their business, financial status, and brand.
Former SEC prosecutor and federal attorney Jacob Frenkel noted that the mention of “personal benefits and related parties” could potentially link back to Musk. Frenkel, who is now a partner at Dickinson Wright in Washington, also stated that the disclosure of the scrutiny on vehicle range indicates a concern about the company’s claims about its vehicle features.
Frenkel stated that it is not clear if Tesla previously only viewed subpoenas as information requests in their quarterly disclosures. He added that the current investigation, which includes aspects related to Autopilot and FSD features, seems to involve subpoenas.
According to Frenkel, it is unclear how far the Justice Department has progressed in their investigation based on the filing, or if there will be any potential criminal charges as a result.
Frenkel stated that including the idea of a negative effect on the company’s reputation implies a greater level of worry about the potential repercussions of a federal legal action. The disclosures could be seen as indicating an ongoing and potentially more harmful investigation.
In late 2015, Tesla began selling its “Full Self-Driving” hardware and has continued to use this name as they collect data to train their computers in driving. The price of “Full Self-Driving” has recently been reduced by $3,000, now priced at $12,000.
In 2019, Musk made a commitment to have a collection of self-driving robotaxis available by 2020. However, in early 2022, he stated that the vehicles would not be fully autonomous until the following year. In April, Musk announced that the system could potentially be operational by 2023.
Since 2021, Tesla has been beta-testing “Full Self-Driving” using volunteer owners. On Tesla’s third-quarter earnings conference call last week, Musk didn’t directly answer a question about the timeline for Tesla vehicles to drive themselves and be deployed as robotaxis. “I guess I am very excited about our progress with autonomy,” he said, adding that the system can drive him around Austin with no interventions.
However, the U.S. National Highway Traffic Safety Administration has been examining Tesla’s semi-automated driving systems since June 2016, when a driver using Autopilot tragically died in Florida after their vehicle collided with a tractor-trailer. In August 2021, another investigation was launched regarding Teslas that crashed into emergency vehicles while utilizing Autopilot. So far, there have been 14 recorded incidents of Teslas colliding with emergency vehicles while in Autopilot mode.
NHTSA has launched investigations into 35 Tesla accidents involving the use of automated systems, including the recent incident in Florida. Tragically, 17 individuals have lost their lives in these crashes. The agency is also looking into reports of Teslas unexpectedly braking without cause.
Advocates for automobile safety and government investigators have consistently voiced their concerns about the insufficient driver monitoring system used by Tesla. In 2018, the National Transportation Safety Board attributed a fatal Tesla accident in California partially to inadequate monitoring. Despite recommending an improved system, the board acknowledged that Tesla has not taken action.