Tesla Battery Flaw Cover-Up Allegation to be Evaluated by NHTSA

The National Highway Traffic Safety Administration says it’s received a petition calling for an investigation of certain Tesla Inc. electric cars and is evaluating the complaint, according to a notice posted on regulator’s website.

The petition, filed by a law firm representing Tesla drivers, alleges that Tesla updated battery management software in response to a potential defect that could lead to battery fires, according to the notice.

NHTSA hasn’t opened a defect investigation but is reviewing whether to do so. Tesla shares fell on the news and were down 1.6% shortly after 11 a.m. in New York trading.

The law firm claimed that Tesla should have notified NHTSA of the potential defect and conducted a recall, NHTSA said in its notice.

NHTSA said it would evaluate the allegations and decide whether to grant or deny the petition. If NHTSA grants it, the agency would launch a preliminary defect investigation into the issue under agency processes.

The petition was filed by the Law Offices of Edward C. Chen, a California law firm representing a number of Tesla drivers in the U.S. who’ve experienced “a significant amount of range loss” after the software updates, including one driver who sued Tesla over the issue in August, according to the petition.

The firm says drivers saw the range of their Teslas fall by 25 miles (40 kilometers) or more after Tesla released two battery management software updates beginning in May 2019. NHTSA estimates 2,000 Model S and Model X vehicles were affected.

Tesla representatives didn’t immediately reply to an email seeking comment.