Tesla Under US Regulator Scrutiny: NDAs and Software Updates

NHTSA Scrutinizes Tesla’s Practices Regarding Software Updates and NDAs

The U.S. National Highway Traffic Safety Administration (NHTSA) has issued two letters to Tesla, focusing on the company’s employment of non-disclosure agreements (NDAs) for owners participating in the early access program for its “full self-driving” software beta. The agency is also questioning Tesla’s method of utilizing an over-the-air software update to address a safety concern that regulators believe warranted a formal recall.

Increased Oversight of Tesla’s Automated Driving Systems

These letters demonstrate a heightened level of scrutiny from NHTSA concerning Tesla’s procedures related to over-the-air software updates and the automated driving capabilities found within its Autopilot advanced driver assistance system.

Understanding Tesla’s “Full Self-Driving” Capability

All Tesla vehicles are equipped with a driver assistance system known as Autopilot as a standard feature. Owners have the option to purchase “full self-driving,” or FSD, for an additional $10,000. This software, repeatedly touted by CEO Elon Musk, is intended to eventually deliver complete autonomous driving functionality.

FSD has been available for several years, undergoing continuous price increases and feature additions. However, it’s crucial to understand that Tesla vehicles are not currently capable of self-driving. FSD incorporates features like Summon, for remote parking, and Navigate on Autopilot, which provides active guidance on highways, including navigating interchanges and changing lanes.

The newest FSD beta aims to automate driving on both highways and city streets. Despite these advancements, it remains a Level 2 driver assistance system, demanding the driver’s full attention, hands on the wheel, and readiness to assume control at any moment.

Software Updates vs. Recalls

The first letter, dated October 12, requests an explanation from Tesla regarding their decision not to issue a recall when a software update was used to correct the detection of emergency vehicles by the Autopilot system in low-light conditions. NHTSA maintains that any repair addressing vehicle safety, implemented via an over-the-air update, should be treated as a recall.

“As Tesla is aware, the Safety Act places a responsibility on manufacturers to initiate a recall by notifying NHTSA when a defect related to motor vehicle safety, or noncompliance with safety standards, is identified,” the agency stated.

NHTSA specifies that a recall notice must be submitted within five business days of the manufacturer becoming aware of the safety defect or noncompliance.

“Any manufacturer deploying an over-the-air update to mitigate a defect posing an unreasonable risk to safety is obligated to promptly file a corresponding recall notice with NHTSA,” the letter emphasized.

Concerns Regarding Non-Disclosure Agreements

The second letter, also dated October 12, addresses Tesla’s use of NDAs for its FSD early access beta program. While owners have already purchased FSD, access to the beta software requires signing these agreements. Recently, Musk also introduced a safety score, based on personal driving data, to determine beta access eligibility.

“Because NHTSA relies on consumer reports as a vital source of information when evaluating potential safety defects, any agreement that could hinder or discourage beta program participants from reporting safety concerns to NHTSA is unacceptable,” the agency wrote.

“Furthermore, restrictions on publicly sharing information negatively impacts NHTSA’s ability to gather safety-relevant data. To ensure these NDAs do not impede NHTSA’s oversight, we are issuing a Special Order to Tesla.”

Musk’s Response and Ongoing Investigation

Elon Musk indicated on Twitter that Tesla would remove the NDA requirement. However, the agency is requesting further information and has given Tesla until November 1 to respond to both inquiries.

The agency is seeking comprehensive responses to ensure full transparency and address the identified safety concerns.