
Tesla, the electric automotive producer, revealed on Monday that federal prosecutors had ramped up their investigation into the company’s activities beyond the scope of its partially automated driving systems. The escalation wasn’t limited to a broader scope of investigation, however. Investigators have forcibly issued subpoenas to the company, a significant shift from the previous approach of merely requesting information.
In the most recent quarterly report submitted to the U.S. Securities and Exchange Commission, Tesla revealed that the Department of Justice is focusing its attention on various aspects of the company’s operations. Of interest are perceived “personal benefits, related parties, vehicle range, and personnel decisions,” though the company provided no additional detail about these areas of concern.
The onset of this broader investigation, accompanied by the more forceful subpoena, indicates an escalated level of scrutiny. Legal experts have speculated that the Justice Department may be turning its inquisitive eye towards Elon Musk, Tesla’s CEO, questioning his conduct and scrutinizing the company’s honesty regarding vehicle features.
Earlier this year, Tesla had acknowledged receiving a Department of Justice request for documents linked to its autopilot and ‘Full Self-Driving’ technologies. Both features are promoted as driver-assist systems, with Tesla maintaining that despite their suggestive monikers, the cars are not wholly autonomous.
University of Michigan business and law professor, Erik Gordon, suggests that the newly revealed investigation throws a noticeably wider net, ambitiously targeting more than just the autopilot and Full Self-Driving features. Furthermore, the issuance of subpoenas illustrates a level of dissatisfaction within the Department of Justice regarding Tesla’s supposed lack of full cooperation.
Tesla, based out of Austin, Texas, has yet to comment on these developments. However, the company maintained in its SEC filing that no government agency has, to their knowledge, settled on any conclusive evidence of wrongdoing on their part.
Interestingly, for the first time, Tesla acknowledged in the report that the ongoing investigations could wreak havoc on the company’s reputation. Jacob Frenkel, a former SEC enforcement lawyer, echoed this concern, suggesting that the expanded line of inquiry hints at a possibly more worrying investigation.
Since first hitting the market in 2015, Tesla’s Full Self-Driving apparatus has been a topic of fierce debate. In 2019, Elon Musk made ambitious claims of a fleet of autonomous robotaxis by 2020, a promise he later shifted to 2023. The skepticism surrounding Tesla’s automated driving systems deepened after a series of accidents associated with their use on real-world roads. A significant spotlight has been placed on them now, following the deaths of 17 people in similar incidents. The U.S. National Highway Traffic Safety Administration has been investigating Teslas’ autopilot lethality since June of 2016. Investigations are also ongoing into circumstances that led to 14 Teslas crashing into emergency vehicles.
This broader investigation, and the potential fallout, puts Tesla on shaky ground. As various aspects of the booming auto-giant’s operations come under the federal microscope, the company must aggressively confront these inquiries if they hope to maintain their brand image and continue their quest of innovating the auto industry.