SEC Investigating Tesla Over Autopilot Safety Claims, Report Says

Topline

The Securities and Exchange Commission is investigating Tesla over claims it made about its Autopilot driver assistance system, according to the Wall Street Journal, as the Justice Department pursues a criminal investigation into the company over its self-driving claims.

Elon Musk speaks at the SATELLITE Conference and Exhibition on March 9, 2020, in Washington. (AP … [+] Photo/Susan Walsh, File)

Key Facts

Regulators are reportedly reviewing whether the automaker misled investors about the safety of its Autopilot system, a feature included on all new vehicles.

Tesla bills Autopilot as a system that “enhances safety and convenience behind the wheel” by largely allowing cars to drive themselves, but the system is believed to have been engaged during scores of accidents involving Tesla vehicles.

The civil regulatory probe is separate from a criminal investigation also looking into whether Tesla oversold claims about the safety of self-driving vehicles, which Reuters first reported Wednesday (the DOJ has not yet filed charges).

Musk did not immediately respond to a request for comment from Forbes, while an SEC spokesperson said the agency “does not comment on the existence or nonexistence of a possible investigation.”

Key Background

Tesla states on its website that its self-driving technology, including Autopilot, does not make its vehicles autonomous and should only be used by a “fully attentive driver, who has their hands on the wheel and is prepared to take over at any moment.” Musk has long hyped the self-driving capability of Tesla vehicles, but he has cooled a bit lately on the technology’s readiness, telling investors on a conference call last week that the company’s cars are not “quite ready to have no one behind the wheel.” The Autopilot system is also the subject of a National Highway Traffic Safety Administration investigation, and recalls could be issued if the probe determines there are safety problems.

Tangent

Musk’s attention appears focused on Twitter at the moment, ahead of the closing of a $44 billion deal that will take the company private and make him its principal owner. The billionaire has been at the company’s San Francisco headquarters each of the past two days.

Surprising Fact

Musk had a run-in with the SEC in 2018 over his claim he could take Tesla private. Regulators found the claim, which led to Tesla’s stock jumping by more than 6%, to be misleading. Musk reached a settlement with the SEC that required him to step down as chairman of Tesla’s board.

Forbes Valuation

We estimate Musk to be worth $221.5 billion, in large part thanks to his shares of Tesla stock, making him the richest person in the world.