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Tesla-SolarCity deal may face costly legal delays

Tesla’s driver-assistance features, which the company calls Autopilot, have been under intense scrutiny in the wake of a fatal crash in Florida on May 7.Probes of the accident by the National Highway Safety Traffic Administration and the National Transportation Safety Board are continuing. When Tesla refused, Mobileye halted hardware support for future platforms and released public statements implying the discontinuance was motivated by safety concerns, according to the Palo Alto, California-based automaker.

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Days after Tesla Motors announced the upgrades for its semi-autonomous Autopilot driving system, an accident involving the company’s Model S sedan has occurred in China.

In response, Mobileye said that its position was that the automated driving system should not allow the drivers to take their hands off the steering wheel: “In communications dating back to May 2015 between Mobileye Chairman and Tesla’s CEO, Mobileye expressed safety concerns regarding the use of Autopilot hands-free”. Later, in a face-to-face meeting, Musk said Autopilot would be “hands-on”, Mobileye said.

In a statement, Tesla has stated that it addresses any incident involving its vehicles very seriously and the company had immediately reached out to their customer after learning of the crash.

Elon Musk sees the deal as a “no-brainer”.

The merger proposal initially met resistance in part because Musk owns more than 20 percent of both companies and his cousins Lyndon Rive and Peter Rive are SolarCity’s chief executive and chief technical officer, respectively.

Musk also said the revised system will allow a driver’s hands to be off the wheel for up to three minutes while following a auto at highway speeds.

Instead of being supplemental to the camera, it said that radar alone “can be used as a primary control sensor”.

Meanwhile, while Tesla stock rose less than 1 percent to $206.75 in early trading Monday, SolarCity continued falling to reach $17.32.

Bill Selesky, senior research analyst at Argus Research, said Shashua’s comments raise questions as to “whether this technology is ready for the public at this point”.

The version 8 update will make a driver keep their hands on the wheel and ignoring the repeated warnings will cause the vehicle to automatically disengage the “autosteer” segment of Autopilot. The car’s driver, 23-year-old Gao Yaning, died in the crash.

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An official interviewed in the report said the car’s Autopilot feature was active at the time of the crash. In addition, Prasinos has demanded that the merger be delayed until the court can fully consider her lawsuit.

Tesla Motors Inc Investors File Lawsuit Against Solar City Corp Deal