Tesla CEO Elon Musk is once again under scrutiny, this time from the U.S. Securities and Exchange Commission (SEC), as the regulator investigates the company’s self-driving claims. The SEC probe is focused on whether Musk and Tesla have made misleading statements about their “Full Self-Driving” (FSD) system, a feature that has been heavily marketed by Musk as a significant advancement in autonomous driving.
Musk’s role in shaping Tesla’s FSD narrative has raised concerns among regulators, especially given the bold claims he has made over the years about the potential of the technology. While Musk has repeatedly promised that fully autonomous vehicles are just around the corner, the company has not yet delivered a product capable of operating without human intervention, despite widespread marketing to the contrary. The SEC’s investigation is shaping up as another chapter in the ongoing conflict between Musk and federal regulators.
Tesla Faces NHTSA Probe After Fatal Collision
In a parallel investigation, the National Highway Traffic Safety Administration (NHTSA) has launched a probe into the safety of Tesla’s Full Self-Driving system, following a fatal collision where FSD was active. The accident involved a Tesla vehicle striking and killing a pedestrian, sparking concerns about the system’s performance under challenging conditions such as fog, glaring sunlight, or reduced visibility.
The NHTSA’s investigation will assess the ability of Tesla’s FSD to detect and respond appropriately in such conditions. It will also review Tesla’s over-the-air software updates to determine whether they have improved the safety and reliability of the FSD system. Tesla’s driver assistance features, including Autopilot and FSD, have faced scrutiny in the past, with several crashes involving active driver-assistance systems, some resulting in fatalities.
Regulator Concerns Over FSD Capabilities and Safety
Tesla’s FSD system has been marketed as a premium option for Tesla owners, but concerns about its safety and capabilities have persisted. According to the NHTSA, FSD should be considered a “partial driving automation system,” despite its branding as “Full Self-Driving.” This designation means that while the system can assist with certain driving tasks, a human driver is still required to take control in critical situations.
Tesla’s FSD feature, which was offered to U.S. drivers for a free trial period, has been involved in a number of collisions. As of October 1, 2024, NHTSA tracked 1,399 incidents involving Tesla’s driver assistance systems, with 31 of those crashes resulting in fatalities. These figures have raised questions about whether Tesla’s self-driving technology is truly ready for widespread use and if it should be marketed as an autonomous driving system.
Musk’s Bold Promises Face Regulatory Scrutiny
Elon Musk has long touted Tesla’s self-driving capabilities as revolutionary, promising that fully autonomous vehicles would soon become a reality. During a recent marketing event, Musk announced that Tesla expects to roll out “unsupervised FSD” in Texas and California in 2025. However, despite these claims, Tesla has yet to produce a vehicle capable of safely operating without a human driver ready to intervene at any time.
Musk’s bold promises have been a cornerstone of Tesla’s marketing strategy, but they have also drawn the attention of regulators. The SEC’s probe into Tesla’s self-driving claims, combined with the NHTSA’s safety investigation, suggests that both agencies are concerned about the accuracy of Tesla’s statements and the real-world safety of its technology. Tesla has not yet commented on the ongoing investigations, but the company’s reputation and future development of self-driving technology could be significantly impacted by their outcomes.
The Business Implications for Tesla
Tesla’s stock has taken a noticeable hit since the announcement of the NHTSA investigation, though the news alone has not triggered any major sell-offs. Tesla shares have dropped 8% in the past week following the launch of its new fully autonomous “Cybercab” concept, which was unveiled with much fanfare at Warner Bros. studio in Burbank, California. Despite Musk’s bold claims that the Cybercab, which features no steering wheel or pedals, will hit the market by 2027, the announcement was met with skepticism from investors and analysts, many of whom questioned the feasibility and safety of such a vehicle in the near future.
While NHTSA’s investigation is still in its early stages, it adds another layer of uncertainty for Tesla. The company’s ambitious vision for autonomous vehicles, spearheaded by Elon Musk, has long been a major part of its appeal. However, if the investigation leads to a recall or stricter regulations, it could put the brakes on Tesla’s future self-driving ventures and impact its market share. For now, the tech world, investors, and regulators are all watching closely as the future of autonomous driving unfolds
