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Tesla Received a ‘Cease and Desist' Letter From U.S. Regulators Last Year Over Model 3 Safety Claims

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【Summary】Last October, Tesla received a cease-and-desist letter last year from regulators for making “misleading statements” over crash ratings for the Model 3 sedan, as well as two subpoenas related to crashes involving its cars.

Eric Walz    Aug 07, 2019 10:05 AM PT
Tesla Received a ‘Cease and Desist' Letter From U.S. Regulators Last Year Over Model 3 Safety Claims
The Tesla Model 3

Last October, Tesla received a cease-and-desist letter last year from regulators for making "misleading statements" over safety ratings for the Model 3 sedan, as well as two subpoenas related to crashes involving its cars, according to documents viewed by Reuters.

In the Oct. 17, 2018 letter to Tesla founder and CEO Elon Musk, it said company's safety claim was "inappropriate" and "inconsistent" with the agency's guidelines.

The U.S. National Highway Traffic Safety Administration (NHTSA) accused Tesla of failing to conform to the agency's guidelines when it claimed the Model 3 had the lowest probability of injury of any vehicle ever tested by NHTSA.

However, Tesla, founder and CEO Elon Musk stood by the electric automaker's safety claims, saying it used NHTSA's own data to back them up. The documents also showed that the carmaker filed a confidential response in August 2018 to one of the subpoenas from that April.

NHTSA said it was referring Tesla's safety claims about the Model 3 to the Federal Trade Commission (FTC) to investigate whether the automaker's statements constitute unfair or deceptive acts or practices.

Asked about the documents, a Tesla spokesman on Wednesday pointed to statements made in the company's Oct. 31, 2018, letter to NHTSA in which it maintained that the Model 3 had the "lowest risk of occupant injury of any vehicle in U.S. government tests."

In that letter, the company's deputy general counsel, Al Prescott, said: "Tesla's statement is neither untrue nor misleading. ... We had hoped NHTSA would welcome such an achievement because it was presented in an objective manner using the agency's own data."

"The guidelines warn against comparison statements like these because such statements mislead consumers about the relative safety of different vehicle models," NHTSA chief counsel Jonathan Morrison said in the letter.

"To say Tesla's midsize sedan has a lower probability of injury than say a larger SUV could be interpreted as misunderstanding safety data, an intention to mislead the public, or both," he added.

The Model 3 had received the top rating on the agency's 5-Star Safety Ratings Program that uses three crash tests and a rollover resistance assessment.

The U.S. Department of Transportation released the documents after legal transparency group PlainSite obtained them under the Freedom of Information Act (FOIA).

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Crashes Involving Tesla Autopilot

Safety groups have also criticized Tesla for being unclear about the need for "hands-on" driving with its autonomous driving feature.

Last year, Tesla Inc. released a report claiming that using its Autopilot automated driving option is 7 times safer than a human driver. In the automaker's voluntarily 2018 Q4 safety report, Tesla reported one accident for every 2.91 million miles driven in which drivers had Autopilot engaged. 

Tesla compared its findings with recent data from the National Highway Traffic Safety Administration (NHTSA), which reported an automobile crash every 436,000 miles. However, U.S. regulators were skeptical over Tesla's safety claims surrounding the Model 3 sedan.

The carmaker's use of the term "full self-driving" is a bold claim, as the option is not yet "Level 4," or fully autonomous by industry standards, in which the car can handle all aspects of driving in most circumstances with no human intervention.

Tesla vehicles were involved in several high-profile crashes resulting in at least three fatalities with its Autopilot system engaged. The latest incident happening in Florida in March, where a Tesla traveling in Autopilot crashed into a semi-truck that crossed its path at a highway intersection. The Tesla Model 3 was traveling at 68 mph and failed to stop for the truck, killing the driver.

Tesla says Autopilot is intended for use with a fully attentive driver, who has their hands on the wheel and is prepared to take over at any time. Tesla warns that its the driver must "maintain control and responsibility for the vehicle".

Despite Musk's safety claims for the Model 3, the automaker says that in its current form, Autopilot "is not a self-driving system." On its Autopilot support website, Tesla wrote that Autopilot, "does not turn a Tesla into a self-driving car nor does it make a car autonomous."

resource from: Reuters

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