Tesla reportedly faces criminal probe into self-driving hype

Plus: Robo-car upstart Argo AI shuts down after automakers pull plug on funding

The US Department of Justice has reportedly launched a criminal investigation into Tesla and its boasts about its self-driving car technology.

This probe could lead to federal criminal charges against the automaker, according to Reuters. The investigation kicked off, we're told, after a series of prangs in which Teslas in Autopilot mode collided with other cars or emergency vehicles. 

Data released by the US National Highway Traffic Safety Administration (NHTSA) in June revealed Tesla's flash motors were in more than 70 per cent of accidents involving cars with advanced driver assistance systems. Five out of six fatal crashes from July 2021 to May 2022 involved Tesla vehicles. 

The automaker's top dog Elon Musk is well known for making grandiose public statements about his company's self-driving technology, claiming his vehicles will reach Level 5 autonomy soon – meaning they can completely and independently drive themselves – and even named Tesla's latest feature set "Full Self-Driving." Tesla also uses the brand name Autopilot for its autonomous capabilities.

In reality, however, Tesla vehicles are graded Level 2, meaning they can perform some automated functions, such as steering, accelerating or braking. When out on the road, drivers must have their hands on the wheel at all times, and be prepared to take over at any point. Tesla's tech is a super cruise control, and not full self-driving.

Prosecutors in Washington DC and San Francisco are reportedly looking into whether Tesla has misled consumers, investors, and regulators with false advertising about its computer-controlled car tech. There is a fear that buyers and shareholders hear product names like Full Self-Driving ad Autopilot, and Musk bragging about their capabilities, and wrongly believe the cars truly can totally and safely drive themselves.

If officials decide to prosecute the company, it may have to cough up criminal damages, face sanctions, or both, if convicted or reaches a deal. The investigation was launched last year, and it's not clear how much progress has been made in reaching a decision, it's said.

Sources told Reuters investigators are still working on the case and have no plans to lay any charges yet; it's possible the probe into Tesla may go nowhere and be dropped.

Separately, the NHTSA has an ongoing investigation into Tesla after the watchdog decided "to explore the degree to which Autopilot and associated Tesla systems may exacerbate human factors or behavioral safety risks by undermining the effectiveness of the driver's supervision." 

And California's Department of Motor Vehicles registered two complaints in July against Tesla alleging it overstated its self-driving technology. "Instead of simply identifying product or brand names, these 'Autopilot' and 'Full Self-Driving Capability' labels and descriptions represent that vehicles equipped with the ADAS features will operate as an autonomous vehicle, but vehicles equipped with those ADAS features could not at the time of those advertisements, and cannot now, operate as autonomous vehicles," the dept said.

A representative from the US DoJ declined to comment. "The US Department of Justice generally does not confirm, deny or otherwise comment on the existence or non-existence of an investigation," a spokesperson told us.

The Register has asked Tesla for comment. Since it abolished its PR department in 2020 we're not expecting a swift response. ®

Speaking of self-driving cars... Argo AI, an autonomous vehicle startup co-founded in 2017 by engineers who quit Google and Uber's robo-car projects, is shutting down. Ford, which pledged $1 billion in funding for the biz, on Wednesday mentioned in its third-quarter report [PDF] that it was pulling the plug on its financial support for the upstart so that it could focus its spending instead on more realistic Level 2 and 3 capabilities rather than Argo's ambitious Level 4.

According to TechCrunch, Ford and and Argo's other main backer Volkswagen will absorb some of the startup's 2,000 staff to develop driving-assistance features internally. All workers are getting a severance package, and those who don't end up at Ford or VW will get another payout, we're told. VW put as much as $2.6 billion into the startup.

From Ford's latest financial report:

In the third quarter, Ford made a strategic decision to shift its capital spending from the L4 advanced driver assistance systems being developed by Argo AI to internally developed L2+/L3 technology. Earlier, Argo AI had been unable to attract new investors. Accordingly, Ford recorded a $2.7 billion non-cash, pretax impairment on its investment in Argo AI, resulting in an $827 million net loss for Q3.

Oof. Just at the end of last month, Lyft started offering robotaxis in Texas powered by Argo's tech. Now Argo AI's toast as its main backers have pulled out with no other support to keep it going.