U.S. authorities have launched a probe into nearly 3 million self-driving Tesla (TSLA) vehicles after some ignored red traffic light signals and crashed into other cars. EV maker Tesla’s shares were down nearly 1% in early trading on the news.
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Traffic Violations
The National Highway Traffic Safety Administration (NHTSA) said it was starting an investigation into 2.88 million Tesla vehicles equipped with the company’s Full Self-Driving (FSD) system because of the potential for traffic safety violations.
The auto safety regulator said that the FSD system, which is designed as a driver assistance feature requiring constant driver attention and intervention when needed, has “induced vehicle behavior that violated traffic safety laws.”
According to the NHTSA, there have been reports of Tesla vehicles running red traffic lights and traveling against the proper direction during lane changes while the FSD system was engaged.
Indeed, the NHTSA said it has six reports in which a Tesla vehicle, operating with FSD engaged, “approached an intersection with a red traffic signal, continued to travel into the intersection against the red light and was subsequently involved in a crash with other motor vehicles in the intersection.”
NHTSA said four crashes resulted in one or more injuries. Tesla did not comment, but a probe like this is why legal and regulatory risks are key for the business and investors alike – see above.
Series of Probes
The investigation is the first step before the agency could seek a recall of the vehicles if it believes they pose an unreasonable risk to safety.
NHTSA said it has identified 18 complaints and one media report alleging that Tesla vehicles, operating at an intersection with FSD engaged “failed to remain stopped for the duration of a red traffic signal, failed to stop fully, or failed to accurately detect and display the correct traffic signal state in the vehicle interface.”
This is the latest in a series of actions taken by the NHTSA against Tesla. Only last month, it launched a preliminary investigation into the electronic door handles of the Tesla Model Y. The probe followed multiple complaints that children were trapped inside the vehicle because the doors could not be opened from the outside. Tesla said it is working on a redesign.
The NHTSA has also launched a probe into the EV giant’s delayed reporting of crashes involving its Autopilot and full self-driving (FSD) systems.
Is TSLA a Good Stock to Buy Now?
On TipRanks, TSLA has a Hold consensus based on 15 Buy, 13 Hold and 9 Sell ratings. Its highest price target is $600. TSLA stock’s consensus price target is $353.91, implying a 19.33% downside.
