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The Department Of Justice Tesla Probe Is Heating Up
Musk might be in deep trouble.
Tesla is the controversial poster boy for the EV revolution. Their breakthrough car designs have led the way with their relatively affordable price tags, long ranges, and rapid charging capabilities. But Tesla has also repeatedly tried to skirt the law. Musk has crushed unions, pushed the legal limits of marketing, potentially endangered the public for his own gain, and even come close to fraud. But, Tesla’s crack team of lawyers have enabled the EV giant to mostly avoid charges. However, they might not be able to for much longer, as the Department of Justice is closing in.
Tesla is facing two probes by the DoJ, both for seriously dodgy business practices, and both are gaining significant traction.
The first case revolves around Tesla’s autonomous FSD beta software, which I have covered in the past (click here). However, since then, there have been some significant developments.
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Let’s quickly recap, so we are all up to speed. FSD stands for “Full Self Driving”, and it differs from every other advanced driving aid on the market in two major ways. How it is developed, and how it is marketed.
Every other self-driving development program relies on a plethora of sensors, like 4D radar, lidar, ultrasound and cameras, to get an accurate and reliable picture of the world around the car. This way, the self-driving AI can be easier to train and hone to pass regulations. They also train their self-driving AI on data gathered on a select few already mapped (i.e. with lidar) roads, with carefully curated data. This process takes longer but makes the AI more reliable in certain situations, hence why companies like Waymo and GM can already run driverless robotaxis on specific roads, as their AI has been proven on these sections of roads. As their AI improves, the roads on which they can legally they can operate will expand until it encompasses the whole country.
But Tesla has bucked this trend with FSD. Back in 2021, Musk removed the radar and ultrasonic sensors from his cars, forcing FSD to run using visual-only data. Tesla’s engineers warned against this, as, like the rest of the industry, they believe an autonomous vehicle needs redundancy sensors to run reliably in an ever-changing environment. There is also a concern that visual-only data is insufficient, as objects can be hidden by low contrast, overexposure, underexposure and lens flares.
However, ultrasonic sensors and radar are expensive, and Musk wanted to eliminate them as a cost-saving measure, believing that eventually, their AI can overcome the challenges of running visual-only. Why does he think that? Every Tesla records data while being driven, which is sent back to Tesla to train the AI. So unlike the other companies, Tesla literally has billions of miles worth of driving data to pull from, and Elon believes this plethora of data is enough to make visual-only work. What’s more, Tesla drivers can opt to use FSD beta, which is the prototype version of Tesla’s AI. So Musk is getting his hoard of fans to be his guinea pigs and test his unproven software at a scale far more extensive than any other autonomous driving company can.
Tesla’s approach has some interesting advantages and disadvantages. If Tesla can get FSD to be a certified fully autonomous driving software, they would enjoy unmatched scalability, rolling the technology out far more rapidly than any competitor and, in turn, taking a massive portion of the self-driving market share. However, development is proving to be far more complex than the other approach, and involving a large amount of the public in beta testing is proving to be legally dubious.
You see, over the past few years, there have been dozens of crashes with Teslas using FSD, some of which have been fatal! Musk has claimed that this is due to people misusing the system, but the DoJ (Department of Justice) thinks otherwise because of how Musk and Tesla are advertising it. Let me explain.
You see, Musk and Tesla have repeatedly over-exaggerated Tesla’s self-driving capabilities. For example, a video showing one of Tesla’s cars previously on their website stated, “The person in the driver’s seat is only there for legal reasons. He is not doing anything. The car is driving itself.” back in 2016, Musk even claimed that their self-driving AI is “probably better” than a human driver. There are countless examples of statements like this where Musk and Tesla appear to endorse their software as practically fully autonomous, particularly the FSD beta version. But, legally, it isn’t. In fact, their own website contradicts these previous statements by saying that their technology is designed to assist with steering, braking, speed and lane changes, but its features “do not make the vehicle autonomous.” In other words, the driver is still the one driving the car.
The DoJ is worried that these communications and marketing materials from Musk and Tesla have led to people misusing the software and treating it as fully autonomous, leading to these accidents and deaths and, as such, have opened up a criminal investigation into Tesla. If found guilty, Tesla could face charges ranging from manslaughter to fraud (as Tesla stock values are based on their self-driving AI, which Musk may have miss-sold).
We have known about this investigation for over a year. But recently, some new revelations have surfaced. On Monday, Tesla confirmed in a quarterly filing to the Securities and Exchange Commission that their automated driving software is the subject of a U.S. Justice Department probe. This is the first time Tesla or Musk has acknowledged this investigation. In the filing, Tesla stated, “The company has received requests for information, including subpoenas, from the DoJ. These have included requests for documents related to Tesla’s Autopilot and FSD features.” Now, Tesla did not disclose what data it sent to the DoJ, but did state that “Should the government decide to pursue an enforcement action, there exists the possibility of a material adverse impact on our business.”
A subpoena is a formal written order requiring a person or corporation to appear before a court or other legal proceedings and testify or produce documentation. It is a legal way of ensuring potentially guilty parties provide relevant data to the case. So the fact the DoJ have had to subpoena Tesla in this way suggests that Musk wasn’t openly sharing data with them that either proves or disproves how FSD is being used or how solid its safety record is.
So, what could Tesla be hiding? Well, I have a hunch.
Tesla used to publicly publish safety data of its autopilot system (what they used to call FSD) every quarter. But that stopped in 2022, just after FSD switched to its visual-only system. It is entirely possible that the shortcomings of ditching ultrasonic sensors and radar made the system significantly less safe, and Tesla didn’t want to publish that, as it would impact stock prices and stop people from purchasing FSD. What’s more, this potential decrease in safety and lack of public acknowledgement from Tesla could be linked to some of these fatal accidents, opening Tesla up to criminal negligence or even manslaughter charges.
Now, this is all speculation, and we should treat Tesla as innocent until proven guilty. However, our current information paints Tesla, Musk and their FSD software in a damning light, even if they are not charged. After all, would you describe FSDs marketing, development, or lack of public data as ethical?
But, as I said, this isn’t the only thing about Tesla being investigated by the DoJ.
You see, Tesla may have been overstating their vehicle ranges and screwing over customers who have raised concerns about it. Earlier this year, Reuters reported that Tesla had created a special “diversion team” to systematically cancel service appointments for customers complaining about the range they were getting from their cars. These customers were outraged that their vehicle wasn’t achieving the advertised range, sometimes by as much as half the number of miles that they were purported to get on a full charge. These customers were booking service appointments in huge numbers, believing something was wrong with the car. However, there wasn’t anything wrong with the vehicle; it was just Tesla had been caught fibbing. As such, Tesla’s diversion team simply cancelled all the appointments. According to Reuters, Tesla had rigged its cars’ software to show over-estimated ranges, leading to this problem.
The same documents filed with the Securities and Exchange Commission detailing the DoJ FSD investigation also revealed another DoJ probe into Tesla’s false range claims. The document stated that Tesla had “received requests for information, including subpoenas from the DOJ, regarding certain matters associated with personal benefits, related parties, vehicle range and personnel decisions.” As such, Tesla might face charges or fines associated with false advertisements and maybe even consumer rights.
While these charges are less severe than the FSDS probe, they are more likely to stick, as there is a precedent and a more apparent breach of the law. Back in 2020, the EPA denied Elon’s claim that the agency incorrectly tested the range of the Model S, resulting in a lower range than Musk thought it deserved. In fact, this year, South Korea fined Tesla $2.2 million for range exaggerations. So this problem seems to be both historic and recognised worldwide.
Now, as both of these probes revolve around Tesla and Musk falsely marketing their products, there is a very slim chance that this more likely range probe can be used to help further the more difficult FSD case. If that does come to pass, then Tesla and Musk really are in trouble.
But will they really face justice? It’s hard to say. Elon and Tesla’s lawyers are the best of the best. They have even been able to get solid class-action lawsuits against Tesla thrown out of court. So, if anyone can take on the DoJ and win, it is Tesla and Musk. But the DoJ seems to know this and is buying their time, collecting data, and waiting until they have a solid enough case to take on this behemoth. So, we might have an exciting court case on our hands in the coming years.
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