Tesla Autopilot U.S. Safety Probe Puts a Damper on Elon Musk’s AI Day
(Bloomberg) -- The federal investigation into Tesla Inc.’s Autopilot comes at an awkward time for Elon Musk. On Thursday -- just three days after the U.S. government announced its probe -- he has a briefing scheduled about the carmaker’s work on artificial intelligence.
While invitations to Musk’s AI Day tout “an inside-look at what’s next for AI at Tesla beyond our vehicle fleet,” autonomous driving is all but certain to come up. In several tweets over the last several months, the chief executive officer has described AI as crucial to rendering cars capable of roaming roads without human intervention.
The National Highway Traffic Safety Administration’s investigation of Teslas on Autopilot colliding with vehicles at crash scenes risks detracting from Musk’s messaging. The regulator said Monday it was examining the system after 11 incidents over the last 3 1/2 years that resulted in 17 injuries and one fatality. The group within NHTSA initiating the probe has the power to determine if vehicles are defective and order recalls.
Tesla shares plunged as much as 5.7%, their biggest intraday drop in more than three months. The shares are negative again for the year after closing last week up 1.6%.
The Tesla features marketed as Autopilot and Full Self-Driving, or FSD, have been “important for narrative,” and any regulatory limits on the functions would be negative for the company, Dan Levy, a Credit Suisse analyst, wrote to clients.
Musk, 50, has changed his tune on autonomy recently to a degree. While he tweeted last month that Tesla’s AI predictions “are swiftly becoming superhuman,” he also referred to developing the technology as “an insanely hard problem.” He said during a July 26 earnings call that it’s debatable whether it makes sense to subscribe to features Tesla markets as Full Self-Driving.
“We need to make Full Self-Driving work, in order for it to be a compelling value proposition,” Musk said. “Otherwise, people are kind of betting on the future.”
Musk has a history of making bold statements during Tesla events to gin up excitement about the company’s prospects.
During Autonomy Day in 2019, he said the carmaker would have 1 million robotaxis on the road by the middle of the following year. His prediction the company’s vehicles would be fully capable of driving themselves and earning fares for their owners when they weren’t using them hasn’t materialized.
Days after that event, Tesla raised more than $2 billion after Musk told investors in a private call that autonomy would be “transformative” and predicted the carmaker could become a half-trillion-dollar company. That panned out -- Tesla’s market capitalization peaked just short of $840 billion in January of this year, though it has now dropped back below $685 billion.
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