Tesla misleads customers about self-driving features, senators allege in request for FTC probe


CNBC 18 August, 2021 - 09:40am 42 views

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Tesla Needs a Formal PR Strategy, and Should Probably Work With Ford

Barron's 18 August, 2021 - 11:12am

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Tesla’s recent safety woes, or perception of safety woes, is hurting investors. It’s another sign that CEO Elon Musk should consider a more formal public-relations effort. He might even want to work with General Motors and Ford Motor to craft a unified vision for the safety of self-driving cars.

Tesla (ticker: TSLA) investors have taken it on the chin this week over autonomous-driving-safety issues.

First came a National Highway Traffic Safety Administration investigation looking into accidents involving the company’s autonomous-driving technology that sent the stock down about 10% in two days.

Now, Democratic Sens. Ed Markey of Massachusetts and Richard Blumenthal of Connecticut are asking the Federal Trade Commission to look into Tesla’s marketing practices regarding the company’s autonomous-driving features, dubbed Autopilot and Full Self-Driving Capability. Despite their names, Tesla’s site notes the features “are intended for use with a fully attentive driver, who has their hands on the wheel and is prepared to take over at any moment.”

“Tesla’s marketing has repeatedly overstated the capabilities of its vehicles, and these statements increasingly pose a threat to motorists and other users of the road,” the senators wrote to FTC Chair Lina Khan. “Accordingly, we urge you to open an investigation into potentially deceptive and unfair practices in Tesla’s advertising and marketing of its driving automation systems and take appropriate enforcement action to ensure the safety of all drivers on the road.”

Tesla stock isn’t reacting to the potential marketing probe in Wednesday trading. Shares are up 4%, gaining back some of Monday’s and Tuesday’s losses. The S&P 500 index is down about 0.2%. The Dow Jones Industrial Average is also off 0.2%.

The single-day reaction to FTC-related news isn’t the point, though. “Tesla cars are the safest cars ever designed,” said Musk back in September at the company’s battery-technology day. That message, however, might not be reflected in current perceptions given the recent stock drop and news flow.

Regulators realize that autonomous-driving features improves vehicle safety. But systems can be misunderstood or misused—and to a greater extent than prior safety innovations, such as all-wheel drive.

NHTSA says that more than 90% of traffic accidents are caused by human error. And on the recent second-quarter-earnings conference call Musk spoke about the safety improvement possible with autonomous-driving systems. “At scale, we think we’ll have [billions] of miles of travel to be able to show that it is the safety of the car with autopilot on is 100% or 200% or more safer than the average human driver,” said Musk. “At that point, I think it would be unconscionable to—not to allow autopilot because the car just comes way less safe.”

His opinion of advanced safety systems appears definitive. And while safety is a branding issue for auto makers, it’s just possible that the industry should agree on how to market autonomous-driving features. That could mean the industry works together to educate the driving public about what current systems can and cannot do. The risks of not acting are that regulators decide for the industry how to sell self-driving features or worse—they could demand features are turned off.

To partner, Tesla would need to beef up its PR-game, which is largely nonexistent in the U.S. That’s something Future Fund managing partner, and Tesla bull, Gary Black has suggested for months.

Black, a former Wall Street analyst and investment manager, has more than 82,000 Twitter (TWTR) followers, and regularly puts out his thoughts about Tesla and other stocks.

Tesla, of course, does communicate with stakeholders. Thursday, the company is hosting an artificial-intelligence event that will try to educate investors and Wall Street analysts about self-driving technology. Tesla issues a quarterly safety report giving accident statistics for its vehicles using autonomous-driving features. Still, there appears to be no direct effort to deal with issues that arise on a daily basis, beyond tweets from Musk.

Tesla didn’t immediately respond to a request for comment about the senators contacting the FTC, or the company’s PR efforts. The FTC confirmed it received a letter from Sens. Markey and Blumenthal but didn’t say more. The senators’ offices provided a copy of the letter to Barron’s. 

Tesla stock has been rangebound for months, bouncing around after good and bad news. Shares rose above $700 earlier this month after Musk tweeted that the company’s Berlin facility could be producing cars by October. However, the stock has given back those gains after this week’s safety-related issues.

Tesla stock is down about 3% year to date, and have dropped about 24% from a January record intraday high of $900.40 a share.

Write to Al Root at allen.root@dowjones.com

Tesla’s recent safety woes, or perception of safety woes, is hurting investors.

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U.S. senators say Tesla Full Self-Driving overstatements puts public at risk for 'serious injury or death'

Autoblog 18 August, 2021 - 07:10am

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SAN FRANCISCO — Two U.S. senators on Wednesday pressed the Federal Trade Commission to probe Tesla, saying the company has misled consumers and endangered the public by marketing its driving automation systems as fully self-driving.

"Tesla and (CEO) Mr. (Elon) Musk’s repeated overstatements of their vehicle’s capabilities ... put Tesla drivers – and all of the traveling public – at risk of serious injury or death," Senate Democrats Richard Blumenthal and Edward Markey said in a letter to newly appointed FTC Chair Lina Khan.

"Tesla drivers listen to these claims and believe their vehicles are equipped to drive themselves – with potentially deadly consequences."

The letter, which came after the National Highway Transportation Safety Administration opened a probe into Tesla's Autopilot on Monday, added to pressure on Tesla.

Tesla did not immediately respond to a request for comment.

Autopilot is a standard feature for Tesla cars and enables the vehicles to maintain distance from cars in front. Tesla sells its advanced driver assistant features such as lane changing and automated parking under the name Full Self-Driving (FSD) for $1,000, although the system does not make its vehicles fully autonomous.

Musk, who has nearly 60 million Twitter followers, uses the term FSD frequently, generally referring to the Tesla package of features, but many consumers take it to mean fully autonomous driving. Musk has touted how safe the technology is and promised that its vehicles would soon drive themselves, only to miss his own deadlines.

NHTSA said in June that since 2016 it has opened 30 investigations into Tesla crashes in which the agency suspects advanced driver assistance systems were in use.

The NHTSA in 2018 said in a letter to Tesla the company had made "misleading statements" about the safety of its Model 3 and had confused consumers. The agency referred the issue to the FTC to investigate whether Tesla’s statements constituted “unfair or deceptive acts or practices.”

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