US safety watchdog's probe into Tesla's Autopilot ushers in get-tough era

UNITED STATES (BLOOMBERG) - The National Highway Traffic Safety Administration's (NHTSA) investigation into a possible defect involving Tesla Inc's Autopilot signals a more activist approach by the Biden administration to regulating technology that is crucial to the car industry's future.

According to its website, NHTSA, which announced the Tesla examination on Monday (Aug 16), has opened 26 probes into various car-safety issues so far this year - more than in all of 2020 or 2019. The agency is on pace to launch about 66 per cent more investigations than the 25 it began last year.

Since United States President Joe Biden was inaugurated in January, NHTSA has also stepped up its investigations into Tesla crashes. Nine probes have been opened since March, the most recent occurred in San Diego last month (July).

NHTSA said it launched the Tesla probe - which covers an estimated 765,000 vehicles from the 2014 model year onwards - after 11 cars using Autopilot collided with fire trucks, police cruisers or other vehicles at crash scenes. The accidents resulted in 17 injuries and one fatality.

Tesla shares fell by more than 4 per cent as of noon New York time on Tuesday (Aug 17), after declining 4.3 per cent on Monday, their biggest drop in 2 1/2 months.

Monday's announcement, combined with an order in June requiring car manufacturers, including Tesla, to report crashes involving automated-driving technology, shows that NHTSA is becoming more aggressive on the issue generally.

"Taken together, that order and this particular enforcement action could be the beginnings of a more active safety enforcement agenda for NHTSA," said Mr Paul Hemmersbaugh, who served as the agency's general counsel under former president Barack Obama and now heads transportation work at law firm DLA Piper.

It is also consistent with the agency's aggressive approach to increasing vehicle fuel economy announced on Aug 5, he said.

Virtually all American carmakers are offering a variety of advanced driver-assistance systems, technologies that can help motorists park, stay in their lane and avoid collisions. They help the driver with a combination of sensors, cameras and radar, but completely autonomous vehicles are still not commercially available.

It is important for regulators to get a handle on driver-assistance technologies, especially as carmakers push towards fully driverless vehicles, said Mr Jake Fisher, director of auto testing at Consumer Reports.

"The technology has advanced so quickly, it's really left regulators scrambling to try to keep up. It's terrific that the regulators are finally realising how serious this is."

NHTSA did not immediately respond to a request for comment on whether the Tesla probe signals a more aggressive approach to car-safety regulation. Tesla and Mr Eric Williams, the company's associate general counsel for regulatory issues, also did not respond.

Lawmakers who have pushed for more stringent car regulation cheered the Tesla probe. "NHTSA is rightly investigating Tesla's Autopilot after a series of concerning crashes," senators Richard Blumenthal and Ed Markey, both Democrats, said in a statement. "This probe must be swift, thorough and transparent to ensure driver and public safety."

Mr Biden has nominated many regulators who have charted a more activist course, such as Federal Trade Commission chairman Lina Khan, who has re-emphasised antitrust enforcement at the agency.

NHTSA has not had a US Senate-confirmed chief since 2017. Since Mr Biden took office in January, the agency has been led by Mr Steven Cliff, a former deputy executive officer at the California Air Resources Board, which regulates auto emissions in the Golden State.

Ms Jennifer Homendy, the new chairman of the National Transportation Safety Board (NTSB), which investigates highway safety issues but has no regulatory authority, praised NHTSA's announcement.

Calling it "a positive step forward", she was "encouraged by NHTSA's leadership taking action in ensuring advanced driving assistance systems function safely".

She challenged Tesla in a series of tweets on Dec 29 last year when she was an NTSB board member, over the company's marketing of what it calls "Full Self-Driving" capability in its cars.

In a Feb 1 letter to NHTSA urging broader oversight of autonomous vehicles, the NTSB said the lack of rules had created a wild-west environment in which companies such as Tesla were testing unregulated technology and putting the public at risk.

NTSB has investigated several Tesla crashes, including at least some of those cited by NHTSA in its investigation announced on Monday. A January 2018 incident in which a Tesla on Autopilot struck the rear of a fire truck on a freeway in Culver City, California, was partly due to the car's design, NTSB said.

Dr Ben Shneiderman, a computer science professor at the University of Maryland who studies human-computer interactions, said it is too soon to tell if the Tesla probe is a sign of a more aggressive regulatory approach.

But he said it is long overdue: "We can't just allow these companies to go do these things."

The social structure and governance around artificial intelligence "has to be broader than Google claiming 'trust us, we're really careful'. Same thing for Tesla".

Tesla's marketing of its driver-assistance systems as Autopilot has led to drivers believing they do not need to pay attention, said Mr David Harkey, president of the Insurance Institute for Highway Safety, which conducts safety testing and represents the insurance industry.

"We've been calling for this more aggressive approach to step in and provide guidance to manufacturers so they're not leading us down a path where consumers misunderstand what these systems can do," he said. "There has to be good driver monitoring."

Mr Jason Levine, executive director at the Centre for Auto Safety, said it is too early to reach any conclusions about NHTSA under Mr Biden.

"There's no doubt it has been more active when it comes to enforcement, but the goal is to be more effective and to make people safer on our roads," he said. "The jury is still out on that question."