Tesla Under U.S. Scrutiny Over Safety Claims

By and | August 7, 2019

Tesla Inc. received a cease-and-desist letter last year from the U.S. National Highway Traffic Safety Administration (NHTSA) for making misleading statements over safety ratings of its Model 3 cars, according to documents seen by Reuters.

The documents also showed that Tesla received two subpoenas from NHTSA in April last year related to two crashes involving its cars. Tesla filed a confidential response in August.

An Oct. 17, 2018 letter shows the NHTSA also accused Tesla of previously failing to conform to the agency’s guidelines and that it was referring the matter to the Federal Trade Commission (FTC) to investigate whether the statements constitute unfair or deceptive acts on practices.

A spokesman for FTC declined to comment. “FTC investigations are non-public, and we don’t comment on investigations or the existence of an investigation,” he said.

The Elon Musk-led electric-car maker claimed in October that its Model 3 car had the lowest risk of occupant injury of any vehicle in U.S. government tests, but NHTSA said it was inconsistent with the agency’s usage guidelines.

The Model 3 had got top rating on the agency’s 5-Star Safety Ratings Program that uses three crash tests and a rollover resistance assessment to come up with an overall ranking.

NHTSA said the Oct. 17 letter its guidelines warn against comparison statements because they mislead consumers about the relative safety of different vehicle models.

Tesla disagreed with the agency’s position. “Tesla’s statement is neither untrue nor misleading,” the company’s Deputy General Counsel, Al Prescott, said in an Oct. 31 letter to NHTSA.

The U.S. Department of Transportation released the documents after legal transparency group PlainSite obtained them under the Freedom of Information Act (FOIA).

Tesla also has been criticized by safety groups for being unclear about the need for “hands-on” driving with its autonomous driving feature.

The carmaker’s use of the term “full self-driving” garners criticism, as the option is not yet “Level 4,” or fully autonomous by industry standards, in which the car can handle all aspects of driving in most circumstances with no human intervention.

Prescott said in his letter that the agency’s assertion that Tesla failed “to conform to NHTSA’s NCAP advertising guidelines now or in the past is incorrect.”

Tesla’s blog on safety still says that its cars “are engineered to be the safest cars in the world.”

It also says Tesla cars “have achieved the lowest probability of injury of any vehicle ever tested by the U.S. government’s New Car Assessment Program.”

The NHTSA and Tesla did not immediately respond to multiple requests for comment by phone and email. Bloomberg was the first to report on the letters.

(Reporting by Supantha Mukherjee and Sathvik N in Bengaluru; David Shephardson in Washington, Editing by Bernard Orr and Saumyadeb Chakrabarty)

Topics USA Claims Auto

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Latest Comments

  • August 8, 2019 at 8:29 am
    CL PM says:
    Agent - why do you say that? I don't own a Tesla, but have several friends who do and they are all very happy with their vehicles. What do you know that they don't?
  • August 7, 2019 at 2:22 pm
    Agent says:
    Polar, Tesla is a joke and anyone buying one is asking for it.
  • August 7, 2019 at 1:50 pm
    PolarBeaRepeal says:
    The NHTSA doesn't take such actions without deliberating the matter carefully. The FTC has the ability to make an informed judgement in the dispute. So far, all 3 parties ar... read more

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