Tesla Autopilot Scrutiny Grows as U.S. Asks If Recall Is Planned

The U.S. National Highway Transportation Safety Administration stepped up its scrutiny of Tesla Inc.’s Autopilot, grilling the company over whether it should have issued a safety recall and questioning its rollout of new software customers are testing on city streets.

The regulator took issue with how Tesla deployed an update to its vehicles last month intended to improve their ability to detect emergency vehicles. NHTSA opened an investigation in August into whether Autopilot is defective following a series of crashes in which the system was engaged before Teslas collided with police cars and fire trucks.

“Any manufacturer issuing an over-the-air update that mitigates a defect that poses an unreasonable risk to motor vehicle safety is required to timely file an accompanying recall notice to NHTSA,” Gregory Magno, the head of NHTSA’s vehicle defects division, wrote Tuesday in a letter to Tesla. He asked whether the company intends to file a safety recall, and if not, to provide technical and legal justification.

The letter also reveals NHTSA’s level of interest in Tesla expanding the availability of Full Self-Driving, or FSD, a system designed to someday handle both short- and long-distance trips without driver intervention. A beta version of the software — which Tesla has charged as much as $10,000 for — was initially limited to just 2,000 customers and rolled out to more drivers early this week.

NHTSA asked Tesla to hand over information about the criteria it used to allow more customers to access FSD, the company’s timeline for rolling out the system and a list of the number of respondents who have requested the software. One of the features available as part of FSD is called Autosteer on City Streets. Drivers are supposed to remain attentive and keep both hands on the wheel when using Autopilot and FSD features.

In a separate letter dated Tuesday, NHTSA took issue with Tesla’s use of non-disclosure agreements that applied to the initial set of customers who have been beta-testing FSD. The agency said that the agreements may have impeded its access to information needed to assess the program.

The letters suggest regulatory pressure is rising on technology that has played a critical role in making Tesla the world’s most valuable automaker. Chief Executive Officer Elon Musk tweeted last month that investors have given the company “significant credit” for its self-driving capabilities.

In both letters, NHTSA warned Tesla could be hit with fines of roughly $23,000 per day if it fails to provide information. The agency is seeking answers by Nov. 1.

Tesla shares rose 0.3% to $808.39 as of 11 a.m. Wednesday in New York. The stock has gained 15% this year, narrowly trailing the S&P 500 index.

NHTSA launched its probe of Tesla Autopilot after almost a dozen collisions at crash scenes involving first-responder vehicles. The regulator — which has the authority to deem cars defective and order recalls — is assessing the technologies and methods Tesla uses to monitor, assist and enforce drivers’ engagement when using Autopilot. It’s also looking into the system’s detection of objects and events on the road, and how it responds.

The technology-news site Motherboard first reported last month that Tesla had subjected customers who were part of the company’s early access program for FSD to a non-disclosure agreement. While the carmaker encouraged the beta testers to share their experience with the system, it asked them to do so selectively, citing critics who want Tesla to fail and would mis-characterize their feedback.

“Given that NHTSA relies on reports from consumers as an important source of information in evaluating potential safety defects, any agreement that may prevent or dissuade participants in the early access beta release program from reporting safety concerns to NHTSA is unacceptable,” the agency wrote to Tesla’s director of field quality.

Musk said after Motherboard published its story that he didn’t know why Tesla required FSD beta testers to sign an NDA and said the company probably didn’t need it. He tweeted confirmation earlier this week that the company had dropped the agreement.

–With assistance from Kasia Klimasinska and Ryan Beene.