Tesla (NASDAQ:TSLA) faces a federal probe over potential securities and wire fraud related to its self-driving technology claims.
U.S. prosecutors are reportedly investigating Tesla for potential securities and wire fraud related to its electric vehicles’ self-driving capabilities. The probe, which involves the company’s Autopilot and Full Self-Driving systems, aims to determine whether Tesla misled investors about the true abilities of these features.
Despite public statements by Tesla and its CEO, Elon Musk, suggesting that the cars can drive themselves, the systems are not fully autonomous and require drivers to remain engaged.
Autopilot and Full Self-Driving Systems Under Scrutiny
The investigation focuses on Tesla’s Autopilot and Full Self-Driving systems, which provide assistance with steering, braking, and lane changes but do not offer complete autonomy.
Prosecutors are examining whether Tesla committed securities fraud by making false or misleading statements to investors about the capabilities of these systems.
Additionally, the probe covers allegations of wire fraud involving deceptive communications regarding the driver-assistance features. The Securities and Exchange Commission (SEC) is also investigating Tesla’s representations of these systems to investors.
Broader Criticism of Tesla’s Practices
Beyond the current investigation, Tesla has faced criticism on various fronts. The company has been accused of fostering a problematic workplace culture, engaging in questionable business practices, and neglecting safety and occupational hazards.
Critics have alleged that Tesla has employed deceptive marketing tactics, made unfulfilled promises, and engaged in fraudulent activities, particularly concerning its self-driving technology and sustainability claims. Reports and lawsuits related to sudden unintended acceleration, brake failures, and vehicle quality issues have also emerged. Moreover, Tesla’s relationships with employees and unions have been strained, with reports of high turnover, poor treatment, and anti-union activities.
The company has also faced accusations of environmental misconduct, inappropriate use of cryptocurrencies, and non-compliance with open-source licenses.
TSLA Slides in Premarket
As the investigation into Tesla’s self-driving systems continues, the company’s stock price has experienced a decline.
As of the latest update, Tesla’s stock closed at $177.81, representing a decrease of $6.95 or -3.76%. In pre-market trading, the price was listed at $172.00, down by $5.81 or -3.27%.
The outcome of the ongoing probe into Tesla’s Autopilot and Full Self-Driving systems, as well as the broader criticisms faced by the company, could have significant implications for its reputation, investor confidence, and prospects in the highly competitive electric vehicle market.
***
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
This article was originally published on The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.