Tesla ‘under investigation for fraud’ over self-driving claims

Elon Musk
Elon Musk has stated at times that a Tesla 'drives itself' and that customers can travel without touching the wheel - Apu Gomes/Getty Images

US prosecutors are reportedly investigating Elon Musk’s Tesla for fraud in a case centred around claims about the electric car maker’s self-driving technology.

The Department of Justice (DoJ) is examining whether Tesla committed wires and securities fraud by overstating the capabilities of its self-driving systems, according to Reuters.

Tesla shares fell by as much as 4pc on Wednesday on the news, which is the latest potential setback to Mr Musk’s plans to develop fully-autonomous vehicles. Shares later recovered slightly.

The Justice Department has been examining Tesla’s Full Self-Driving (FSD) technology as well as its more basic Autopilot features since 2021, but it was not previously known that the company could be pursued for fraud.

Authorities are reportedly examining whether Mr Musk and the company have overstated the technology’s abilities, according to Reuters.

Despite the names Autopilot and Full Self-Driving, Tesla’s driver assistance systems require human supervision and the company encourages drivers to keep their hands on the wheel.

However, Mr Musk has stated at times that a Tesla “drives itself” and that customers can travel without touching the wheel.

Mr Musk’s statements are reportedly being examined however it is not thought he is under personal investigation.

Wire fraud is a federal crime related to using US telecoms networks to commit fraud, while securities fraud relates to misleading investors.

News of the reported DoJ inquiries comes after the US National Highway Traffic Safety Administration (NHTSA) said in a report last month that Tesla’s Autopilot had been involved in at least 13 fatal crashes.

tesla crash
Tesla's Autopilot feature has been involved in at least 13 fatal crashes including a 2018 incident that claimed the life of Walter Huang - KTVU-TV via AP

The agency criticised the system’s name for overstating its capabilities. Tesla has issued multiple updates to Autopilot and FSD after requests from the NHTSA.

Mr Musk has previously called criticism of the Autopilot name “idiotic”.

The company has faced multiple lawsuits over its Autopilot technology after Tesla owners died while the technology was active, although the company has not been found liable to date.

Mr Musk has bet Tesla’s future on developing autonomous vehicles, spending heavily on AI supercomputers and promising to unveil a “robotaxi” in August that may come without a steering wheel or pedals.

The company has previously disclosed to investors that the Justice Department had sought information about the driver assistance systems. Tesla and the Justice Department did not comment.