According to WSJ, the US Securities and Exchange Commission SEC is now looking into whether Tesla failed to disclose to investors a fatal auto accident in May involving an electric vehicle that was driving itself. The National Highway Traffic Safety Administration (NHTSA) has opened a preliminary investigation into the incident. Meanwhile, on a Tesla driver in Montana similarly said the Autopilot feature was on during a July 9 crash.
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Tesla told ZDNet that it has not received any communication from the SEC regarding this issue.
Musk has also been under fire for Tesla’s $2.5-billion bid for Tesla’s sister company Solar City.
SEC spokeswoman Florence Harmon declined to comment.
Tesla’s shares fell 1% in after-hours trading after the report about the perceived SEC investigation.
NHTSA said last week that it was also looking into a July 1 crash in Pennsylvania of a Tesla Model X sport utility vehicle to determine whether Autopilot functions were engaged at the time of the accident.
Tesla’s shares rose 3.7 percent Monday to close at $224.78 on news that Musk plans to unveil a new “master plan” for the company later this week. Tesla Motors was somehow able to gain investors’ confidence as Elon Musk teased about his secret plan yesterday.
“Moreover, a product liability claim could generate substantial negative publicity about our products and business and would have material adverse effect on our brand, business, prospects and operating results”.
John Coffee, a law professor at Columbia University and an expert in securities law, told Fortune last week that he believed the company should have disclosed news of the death earlier.
“The behavior of the stock price-the fact that it bounced back very promptly-most courts would say was fairly persuasive evidence that it was not material”. Tesla said that any available technology is not agile enough to respond to such a situation. “There are going to be wrinkles along the way”. The information comes from an anonymous source said to have knowledge of the matter.
Noting that its Autopilot must be activated by the driver before it can be used, Tesla’s website advises that “the system is new technology and still in a public beta phase”.
Mr. Musk has urged caution about using Autopilot while also aggressively touting its capabilities.
Owner’s manuals warn Autopilot may not detect all objects and state that the technology “is designed for your driving comfort and convenience and is not a collision warning or avoidance system”.
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The investigations related to the Autopilot system come at a time when Musk and his high-flying company are under pressure on several fronts.
