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Why Tesla's Update To Autopilot Software Is Being Questioned By Federal Traffic Safety Regulator

Tesla Inc.(NASDAQ: TSLA) was the subject of a U.S. National Highway Traffic Safety Administration (NHTSA) probe in mid-August over its Autopilot feature. It has now emerged that the federal agency has taken the company to task for a couple of more issues with respect to its advanced assisted driving and its full self-driving (FSD) programs.

What Happened: The NHTSA has questioned Tesla on why it failed to file recall documents when it did over-the-air updates to its Autopilot software.

The software updates done by the company in late September were meant to help improve the detection of emergency vehicle lights in low-light conditions.

This recall notice must be filed with NHTSA no more than five working days after the manufacturer knew or should have known of the safety defect or noncompliance, the NHSTA said in a letter dated Oct. 12 to Tesla Director of Quality Eddie Gates.

“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,” the agency said.

Tesla is given time until Nov. 1 to file its response and if it fails to do, it should seek an extension no later than five business days before the response due date.

At least a partial response has to be filed by the original deadline, even if an extension has been granted, the NHTSA said.

Related Link: What Tesla’s Record Q3 Deliveries Could Mean For Its Financial Results

The regulator also said Tesla may be “employing practices” that could prevent access to safety-related information that is essential for its ongoing probe into the EV maker’s FSD software, Bloomberg reported.

Tesla’s FSD early access beta release program has non-disclosure agreements, which allegedly prevent participants from sharing information portraying the feature negatively, the report said.

Why It’s Important: Tesla has seen a pick-up in sales momentum in September, thanks to its solid performance in China, one of its key markets.

The company recently released FSD beta 10.2 to select drivers, which will provide early access to new features it is still working on, such as “autosteer on city streets.”

Against the backdrop, the federal probe is likely to remain an overhang on the stock.

TSLA Price Action: At last check Wednesday afternoon, Tesla shares were up 0.42% at $809.24.

Related Link: 5 Key EV Headlines You May Have Missed This Week: Tesla’s Texas Show, Bulls Pile Into Nio, Plug ‘Powers’ Up, GM Goes All Out, Faraday Future Under Short Attack

Photo: Courtesy Tesla Inc

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