Tesla has trouble: a new accident and two investigations by US regulators

Photo: Reuters

Today it became known that, with respect to Tesla, the Securities and Exchange Commission (SEC) launched an investigation. It was decided to start the investigation after the company representatives did not inform the investors about the accident of the electric vehicle, which resulted in the death of the driver. Ilon Mask called this information irrelevant for investors.

The fatal accident occurred on May 7th . Then died 40-year-old owner of the Tesla Model X named Joshua Brown. The autopilot did not identify the van trailer as an obstacle and flew under it. Tesla reported an accident to the US National Highway Traffic Safety Administration and began its own investigation into the incident, wanting to understand if the autopilot or the driver was to blame.

At that time, the company did not yet know whether the Autopilot mode was activated in the affected electric vehicle. The accident was reported to the regulator 9 days after the accident. According to Tesla, the notification was sent even earlier than required by law.
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Representatives of the US National Highway Traffic Safety Administration on July 1 expressed the need for additional study of all the circumstances of this case. Regulatory officials want to determine the cause of the accident and make sure that the incidents with Tesla cars are not the result of mistakes made when developing a computer control system. The company itself calls this technology Autopilot. In fact, this is a virtual assistant driver who can help keep the lane, control the speed or park. The system can drive the car on its own, but Tesla Motors does not recommend it, either, especially placing the responsibility for using the Autopilot on the driver.

SEC also carefully analyzes the information provided by Tesla about the accident. The commission will have to find out whether investors could not have reported the incident, or the management of Tesla decided not to say anything so that the value of the shares would not fall. So far, the investigation is at an early stage, where no action is expected on the company by the regulator. “Tesla has not received any notifications from the SEC regarding what happened. Last week we published a post on our blog, providing comprehensive information about the incident, ”said representatives of Tesla Motors.

A spokesman for the company said that the accident that caused the death of the driver was the first over 209 million kilometers traveled by electric vehicles of the company with the Autopilot feature enabled. The technology was first introduced in October.

A known problem for Tesla could be the sale of a company's shares worth $ 2 billion. The shares were sold by Ilon Mask and the company itself, and the operation was carried out at a time when management was already aware of the accident - on May 18. A spokesman for Tesla Motors said that Ilon Musk sold his shares because of tax requirements. “During the sale of shares, I did not know that an electric car accident had occurred with the Autopilot mode activated,” commented Musk. “We told regulators that someone died in an accident, but we didn’t know that the Autopilot worked. I also do not think that this information is essential for investors, and I still did not know much. ”


Tesla Model S version 7.0 update (photo: Reuters / Beck Diefenbach)

On May 18, the company sent an expert to the accident site to study the accident. Remote data could not be obtained due to significant damage received by the electric vehicle. In late May, Tesla completed the study logs and completed its own investigation of the incident. The accident was reported to the public on the results of June 30th. On the same day, the National Highway Traffic Safety Administration announced the start of an investigation into the accident.

July 1, the value of the company's shares rose by 2%. Since then, the company's shares continued to grow, reaching $ 224.78 on Monday.



Experts familiar with the course of the investigation state that there is no clear rule for auto companies to report such incidents to investors. Law professor Adam Pitchard (Adam Pritchard) of the University of Michigan is skeptical about the possibility that Tesla was found guilty of hiding information about the accident from investors. "The situation with the value of the company's shares on the stock exchange - the fact that the price recovered very quickly is direct evidence of the fact that the information about the accident in court is immaterial," he says. The professor also claims that the technology is still being tested, and problems with the Autopilot are quite expected.

The press service of the company said : “Tesla, like any other automaker, does not find it necessary to share information about all accidents involving Tesla electric vehicles. Every year more than a million people die in accidents, but automakers do not share information about each incident with investors ... ”. It really is. Usually, companies do not really report anything to investors about accidents, considering this information as irrelevant. Every year around the world, hundreds of thousands of cars fall into an accident, and this does not have a significant impact on the value of car manufacturers' shares.

In the case of Tesla, the situation is more complicated. The fact is that although the company warns drivers about the responsibility for activating the Autopilot mode, Tesla Motors is at the same time conducting an aggressive advertising campaign to promote this technology. The advertisement states that it is the most modern computerized motion control system. Investors are investing in the company's shares also because they believe in Tesla's technological superiority over the rest of the automakers.

The manual for the electric vehicle says that the Autopilot may not identify some objects. It is also said that the technology "was created for convenience while driving, but it is not a system of avoiding obstacles or preventing collisions."

US regulators have announced the beginning of an investigation into the accident that occurred on July 1. Then the Model X with the included autopilot entered the safety fence, crossed several lanes of the road and crashed into a concrete divider. The electric car turned over to the roof and stopped. According to eyewitnesses of the accident, the driver’s error on this stretch of road is practically excluded: there are no turns, the markings are clear, there are corresponding signs. Why the Tesla autopilot lost its way is unclear; it remains to be studied.

On July 10, a new accident occurred, this time with the participation of Tesla Model X. A friend of the electric vehicle owner reported the incident . A friend was driving as a passenger. According to him, the Autopilot was activated in the car, driving speed reached 80-100 km / h.



The autopilot did not "see" the wooden fence, and drove into it at full speed. The fence was demolished, and the electric car flew off the road. People did not die, although they were damaged. But the electric car is broken by the passenger.

Probably, this accident will also be studied by regulators.

Tesla Motors has a lot of troubles now: several accidents in a row at once, one - with a fatal outcome. In addition, the company was unable to fulfill its obligations to deliver the declared number of Tesla Models X to the market. So far, all these events have not affected the price of Tesla Motors shares and reputation, but the market can respond accordingly at any time.