Self-driving Tesla reminder: Why are they still on the road?

Self-driving Tesla reminder: Why are they still on the road?

On Thursday, Teslas equipped with Full Self-Driving software were found to be defective enough to warrant a reminder because they tend to crash. On Friday, all of those faulty cars remained on the road, with the unreliable software still available to drivers, and no firm deadline on when it will be fixed.

Tesla’s recall raises important and thorny questions not only about Tesla, but also about auto safety regulations in the United States.

For starters, why is the National Highway Traffic and Safety Administration allowing drivers to continue using experimental and dangerous software while Tesla tries to fix it? It is not known when the software will be patched. NHTSA hasn’t imposed any deadlines, and Tesla CEO Elon Musk has a habit of making big promises that he doesn’t keep.

The question is also what the recall might mean for Tesla’s future if the fixes don’t work. After all, Musk said last year that the success or failure of full self-driving “is the difference between Tesla being worth a lot of money or being worth practically zero.”

FSD is an option that Tesla sells for $15,000. In its current state, the technology is considered by Tesla to be “beta” software, a term that computer users might recognize as a warning label on a newly released software program, not ready for prime time, whose code could still be pocked with bugs. (Important to note: so-called fully self-driving Teslas are incapable of fully driving themselves.)

According to the NHTSA, the faults that afflict the FSD can cause a car to suddenly accelerate and run through yellow lights, violate speed limits, and continue to drive straight out of cornering lanes. A YouTube search for “FSD” will reveal many other software issues, including a tendency for cars with FSD engaged to cross double yellow lines in oncoming traffic.

Due to the decades-old process by which traffic statistics are collected in the United States, it’s impossible to know how many injuries and deaths FSD and its feature-limited sibling, Autopilot, have caused.

Safety officials are grappling not just with new technologies in the auto industry, but also with Tesla in particular, an automaker that “regularly thumbs its nose at NHTSA,” said Phil Koopman, a professor and autonomous technology expert at Carnegie Mellon University. .

So in its negotiations with Musk, why didn’t NHTSA demand that the faulty FSD or features be disabled while Tesla attempts a fix? NHTSA won’t say. Koopman, emphasizing that he was just speculating, said it was possible that NHTSA feared being sued by Musk, which would require a huge commitment of resources and drag the situation out. “NHTSA would be motivated to get this thing fixed in a way that involves the least trauma and gets it done faster,” Koopman said.

Bryant Walker Smith, a law professor at the University of South Carolina, said regulators have just come to grips with recent sweeping changes in automotive technology. Even the term “recall” is becoming obsolete: the Tesla fix will be wirelessly delivered to cars wherever they are through what’s called over-the-air software delivery. Smith proposes the term “virtual recall”.

NHTSA’s recall rules have evolved over the decades, based primarily on hardware, not software, defects. A recall can be voluntary, usually after negotiation with NHTSA, or forced, which can happen if negotiations fail. A voluntary recall for a steering problem, for example, would result in an automaker notifying owners within a “reasonable” time that a defect exists and the company will fix it, Smith said. “But federal law does not require the private owner of a non-commercial vehicle to perform the recall.”

What’s “obviously different here,” Smith said, “is that Tesla has the ability, through over-the-air software updates, to immediately disable the entire system in which faults have been identified, and then , when an update is ready, to achieve a 100% recall completion rate.” But Tesla doesn’t, and NHTSA doesn’t require it.

In fact, NHTSA didn’t give Tesla any hard deadline to find fixes. In its recall report, the agency said the defects would be repaired in the “coming weeks”. Asked by email what happens if Tesla drags its feet or fails to comply, NHTSA did not respond. She also didn’t respond when asked how she would even know the flaws had been fixed.

Tesla has been collecting revenue from add-on FSD functionality since 2016, and over those years Musk has continued to promise that true self-driving was imminent without actually achieving it.

Revenues are substantial. In its latest financial filings, Tesla said cumulative FSD orders totaled more than 400,000. “Those are big, big numbers; we’re talking billions,” said Francine McKenna, a lecturer at the Wharton School of Business and producer of accounting newsletter Substack. excavation.

She believes Tesla has earned at least $4 billion in cash on FSD over the past eight years. The company recognized more than $400 million in the fourth quarter of last year, she said, helping the company beat analysts’ earnings estimates and raise the price of its products. recent distressed stocks.

It was the first time Tesla announced that it had reclassified FSD cash from deferred revenue to actual revenue and profit, McKenna said, although she said Tesla may have increased profits this way over the course of the year. previous periods without announcing it.

The NHTSA recall could shake Tesla’s entire approach to FSD accounting, with serious implications for Tesla stock, she said. The company may have to reinject FSD’s cash into deferred revenue and restate earnings “if it cannot resolve this issue within a reasonable period of time” and may not be able to recognize FSD’s revenue and earnings at the time. future if the software is found to be permanently broken. “And they may have to refund a lot of that” to FSD customers, she said.

Tesla did not respond to requests for comment. Musk disbanded Tesla’s media relations department in 2020.

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