Tesla recalls: Too little, too late?

Jeremy Banner was killed instantly when his self-driving Tesla slammed into a truck on a Florida highway in 2019. He had, seconds before, taken his hands off the steering wheel after engaging the Autopilot feature. Banner’s was just one of at least 17 deaths that have been tied to the self-driving feature of the high-priced vehicle.

Florida Circuit Judge Reid Scott said it was time for Tesla to face the music, rejecting the company’s motion for summary judgment. He found that there was a “genuine dispute” over whether Tesla had “created a foreseeable zone of risk that posed a general threat of harm to others.”

Whether because of the lawsuit or for some other reason, Tesla has now recalled just about every car it ever built: more than two million vehicles manufactured between 2012 and the present. But despite this massive recall, the company has never acknowledged responsibility for any deaths or injuries that may have been caused by its vehicles. In fact, Tesla has consistently and strenuously argued that any and all mishaps were attributable to driver errors and omissions.

The car’s self-driving capabilities have been a key selling point for Tesla, and its videos and other marketing materials have boasted of better-than-human response skills. Yes, there have always been disclaimers warning drivers that they needed to remain vigilant and that there were significant gaps in the car’s knowledge base, but these were buried in the fine print and were essentially downplayed by compelling marketing videos showing the cars being operated with no human oversight or involvement.

Few drivers – if any – could have been expected to know and understand the implications of these disclaimers as they drove off the lot in their dream cars. It should therefore be no surprise that in December 2023, after a more than two-year investigation, the National Highway Traffic Safety Administration (NHTSA) determined that drivers were not always paying attention when Autopilot was on. In fact, the agency found that the system did little to ensure that attention was being paid. After thoroughly reviewing the Autopilot system, the NHTSA concluded that Tesla’s system for monitoring drivers lent itself to “foreseeable misuse.”

Tesla’s engineers certainly understood the risks. Their records and reports are replete with data about potential problems with the Autopilot system. Those records are sure to play a significant role in the case of Banner v. Tesla, 50-2019-CA-0099662, Circuit Court of 15th Judicial Circuit, Palm Beach County, Florida. The plaintiff will present them to prove that Tesla, its CEO Elon Musk, and other company executives knew that the vehicle’s autopilot system was defective but that they nevertheless marketed and sold an extremely dangerous product.

So is Tesla’s recall an admission that it bears responsibility for the accident? Far from it. The company is now facing significant liability – including millions of dollars in punitive damages – and it is, ultimately, looking out for its bottom line. Under the rules of evidence, when parties take subsequent remedial measures, those measures cannot be introduced at trial as an admission of guilt or to prove that they did anything wrong. Tesla’s priority is to limit civil judgments against it, to convince jurors that its actions were reasonable.

And jurors who learn about the recall might actually be inclined to give the company the benefit of the doubt, to view Tesla as a company that acts responsibly. Recalls are voluntary, and automakers regularly recall vehicles when there are potential safety issues. Tesla’s recall could end up being viewed as part of that tradition.

But Tesla has a number of blemishes on its record, and those marks could loom large in the Florida plaintiff’s case. Tesla has been involved in more recalls than any other car maker. As of February 2023, it had recalled a total of 5,093,690 cars; 81 percent of those recalls happened after January 2022. Given the many years of Autopilot problems, as well as complaints about other serious vehicle problems, the company’s response could be seen as anything but timely. When Tesla did agree to issue a recall notice in one instance, it went on the record disagreeing with the NHTSA findings.

In 2022, the Justice Department launched a criminal investigation into Tesla’s safety claims regarding its self-driving cars, and the SEC opened its own investigation into the company’s Autopilot claims and their impact on the company’s value. The NHTSA’s finding regarding foreseeable misuse of the Autopilot system will be in front of the jurors who are asked to reach a verdict in the Banner lawsuit. That conclusion could make it much easier to prove future Autopilot cases against Tesla.

To further muddy the waters, Tesla has apparently known about faulty suspension systems that have rendered many cars undrivable within hours of purchase. Such problems have been reported as far back as 2016 by customers in Japan, China and the United States. These issues have been documented by Tesla engineers, but instead of correcting the defects, the company has repeatedly blamed drivers for the problems and generally refused to cover repair costs.

Recently, Norway’s traffic safety regulator opened an inquiry into suspension failures in Tesla cars that could result in a recall in one of Tesla’s largest markets. Additional failures have been reported in drive axles and steering racks, both expensive components, with little response from the company other than statements attributing the problems to abuse by drivers.

The Washington Post recently reported that after a fatal 2016 crash, the National Transportation Safety Board (NTSB) called for limits on where driver-assistance technology could be activated, but without regulatory power over Tesla, it could only refer the matter to its peer agency, the NHTSA. The NHTSA failed to take action, saying it would be too complex and resource-intensive to verify that Autopilot was used within the conditions for which it was designed.

So will anything change at Tesla? Even after it agreed to a recall of almost all its vehicles, the company in fact doubled down on its position that driving with Autopilot was safer than driving without it. Given the apparent hubris of Elon Musk and the company’s proud status as an industry disruptor and boundary-pusher, there may be little change in how it does business.

NHTSA findings do not have the force of law; they are merely advisory. And given that the NHTSA is afraid to take any action against Tesla, it will be up to Tesla itself to voluntarily issue recalls and take other actions to correct defects and improve safety. Since we know they have previously tried to pass the buck by blaming the consumer for its cars’ malfunctions, it is a fairy tale to think Tesla will responsibly police itself when it comes to safety.

The records show a long history of overlooking and downplaying problems, even when there was clear documentation of those problems. It can therefore be hard to predict how the company will respond in the event of a large verdict against it and the potential for many more such judgments. It may ultimately take an uprising from investors and board members to finally change Tesla’s cavalier attitude into one of actual corporate responsibility. But I wouldn’t hold my breath.