Musk’s fraud charge will be a force for positive change at Tesla, says tech investor Munster

I think there's a 25% chance Musk remains Tesla CEO: Munster
2 Hours Ago | 09:06

The fraud charge for Tesla founder and CEO Elon Musk could spark positive change at the electric car maker, said Gene Munster, managing partner of technology-focused venture capital firm Loup Ventures.

“I think this is actually, strange as it sounds, may be a positive force for some change at the company. We've been advocating that Elon has a different role — stays at Tesla but different visionary role, non investor-related focus. I think there's an opportunity this will pave the way for some of that,” Munster said Thursday on “Closing Bell.”

Musk has been sued by the Securities and Exchange Commission for fraud, according to court documents filed Thursday. Sources close to Tesla told CNBC that the company was also expecting to be sued, though it was not named as a defendant in the complaint.

In August, Musk tweeted that he was considering taking Tesla private, adding “funding secured.” The tweet spurred a scandal-ridden fall for Tesla and sent the stock seesawing for weeks.

“This unjustified action by the SEC leaves me deeply saddened and disappointed. I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way,” Musk said Thursday in a statement.

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Munster said there's “greater than 50 percent” chance Musk gets removed as an officer, because the SEC, “they want blood here.” Munster said it is unlikely Musk will be ousted from the company completely — a fear he said is fueling Tesla's sharp after-hours decline.

“Investors are jumping to that conclusion … that will be on investors minds' for a long time. But that is only one of four remedies for being found guilty of securities fraud, and keep in mind, he has not been found guilty,” Munster said.

Although he thinks the charge could push Musk into a position that better suits his talents for “product and vision” at Tesla, he admitted the news “plays into the difficulty that Tesla is having,” and will likely keep the company's stock “range-bound for probably the next three months.”

“The most important part is that he remains an important part of the fabric of that company … and he can do that without having a spot on their board or an investor-facing role,” Munster said.

Colin Rusch, senior analyst at Oppenheimer, agreed that there is a need for additional leadership at Tesla. He compared Tesla to Apple, which saw its stock appreciate “pretty significantly” for several years after CEO Steve Jobs left.

“We wouldn't be surprised to see Musk settle this fairly quickly,” he said on “Closing Bell.” “He probably does want to stay involved in the company in an active way and will try to do that.”

Shares of the automaker fell more than 10 percent in extended trading Thursday.

— CNBC's Sara Salinas contributed reporting.

SEC charges Tesla CEO Elon Musk with fraud

Kiichiro Sato | AP
Tesla CEO and founder of the Boring Company Elon Musk.

Tesla CEO Elon Musk has been sued by the Securities and Exchange Commission for fraud, according to court documents filed Thursday. Sources close to the company told CNBC the company was also expecting to be sued, though Tesla was not named as a defendant in the complaint.

Shares of the automaker fell roughly 10 percent in extended trading Thursday.

The SEC complaint alleges that Musk issued “false and misleading” statements and failed to properly notify regulators of material company events. The SEC plans to hold a press conference at 5 pm E.T.

In August, Musk tweeted that he was considering taking Tesla private, adding “funding secured.” The tweet spurred a scandal-ridden fall for Tesla and sent the stock see-sawing for weeks.

Musk later explained that he had been in discussions with the Saudi Arabian sovereign wealth fund and felt confident the funding would come through at his proposed price of $420 per share.

The SEC, in its complaint, alleged:

Musk knew that he (1) had not agreed upon any terms for a going-private transaction with the Fund or any other funding source; (2) had no further substantive communications with representatives of the Fund beyond their 30 to 45 minute meeting on July 31; (3) had never discussed a going-private transaction at a share price of $420 with any potential funding source; (4) had not contacted any additional potential strategic investors to assess their interest in participating in a going-private transaction; (5) had not contacted existing Tesla shareholders to assess their interest in remaining invested in Tesla as a private company; (6) had not formally retained any legal or financial advisors to assist with a going-private transaction; (7) had not determined whether retail investors could remain invested in Tesla as a private company; (8) had not determined whether there were restrictions on illiquid holdings by Tesla's institutional investors; and (9) had not determined what regulatory approvals would be required or whether they could be satisfied.

Musk said in an interview with The New York Times that he calculated a take-private price of $420 by rounding $1 up from what would have been a 20 percent upside at the time.

“According to Musk, he calculated the $420 price per share based on a 20% premium over that day's closing share price because he thought 20% was a 'standard premium' in going-private transaction,” the SEC alleged in its suit. “This calculation resulted in a price of $419, and Musk stated that he rounded the price up to $420 because he had recently learned about the number's significance in marijuana culture and thought his girlfriend 'would find it funny, which admittedly is not a great reason to pick a price.'”

In the hours after the initial tweet, Musk doubled down on the proposal in subsequent tweets. The SEC cited those subsequent tweets in the complaint as additional misleading statements.

Musk also failed to properly notify regulators about his plans to take the company private, the complaint alleges.

Tesla's board of directors initially formed a special committee to evaluate the take-private proposal, but Musk ultimately called off the privatization plans on Aug. 24.

Tesla did not immediately respond to request for comment.

Read the lawsuit as filed in the Manhattan District Court below, and download the file here:

This is breaking news. Please check back for updates.

—CNBC's
David Faber
contributed to this report.

Most drivers don’t understand limitations of car safety systems, AAA finds

Hxdyl | iStock / 360 | Getty Images

Most drivers don't understand the limitations of advanced safety technology installed on new vehicles, according to a new study by AAA Foundation for Traffic Safety.

The study indicates that drivers overestimate the capabilities of features such as blind-spot monitoring systems, automatic emergency braking and adaptive cruise control.

“A substantial proportion of respondents demonstrated what we believe was a concerning lack of awareness of some of the key limitations of the technologies,” said Brian Tefft, senior researcher for the AAA Foundation.

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The findings raise questions about whether Americans are ready to adapt to partially self-driving vehicles, which typically require drivers to remain alert and ready to take over the steering wheel if the car can't handle the conditions it encounters.

Problem spots flagged by AAA:

• Blind-spot monitoring: Nearly 80 percent of drivers don't understand the limitations or thought that the system had greater capability to detect fast-approaching vehicles, bicycles and pedestrians. Relying too much on blind-spot monitoring, about 25 percent don't look for oncoming vehicles when they change lanes.

• Forward-collision warning and automatic emergency braking: Many drivers confuse the two. One is a warning system, while the other takes action. More than 40 percent of drivers don't know these limitations.

• Adaptive cruise control: About 29 percent of drivers who use this system, which accelerates and brakes on its own, are sometimes comfortable “engaging in other activities” while the system is activated, according to the study.

To be sure, the researchers emphasized that advanced driver assistance systems are generally helpful. Such technologies can prevent about 40 percent of crashes and 30 percent of crash deaths, according to federal estimates.

The problem is that technology backfires when people don't understand how it works.

“I think there's a general assumption among members of the public that technologies in vehicles today will do things for us,” said Jake Nelson, director of traffic safety advocacy and research for AAA. “These technologies are not meant to replace us behind the wheel. They're meant to help us out.”

Nelson said that it's important for dealers, automakers and rental-car companies to educate drivers, at the time they take delivery of their vehicle, on how these systems work.

And “we shouldn't be marketing them in a way that could potentially mislead folks,” Nelson added.

GOOGL

Tariffs cost Ford $1 billion in profit and hurt sales in China

Luke Sharrett | Bloomberg | Getty Images
An employee works on a Ford Expedition sports utility vehicle on the assembly line at the Ford Kentucky Truck Plant in Louisville, Kentucky.

President Donald Trump's tariffs are hitting Ford's finances hard.

The second-largest U.S. automaker has suffered $1 billion in lost profits from tariffs on metals imported to the United States, said Ford CEO Jim Hackett in an interview with Bloomberg TV on Wednesday.

The U.S. has a 25 percent tariff on steel and a 10 percent tariff on aluminum imported from several countries, an early step in an escalating trade war that threatens to raise prices on goods and deal a blow to firms in a wide range of industries, including autos.

The tariffs come at a time when Ford is trying to improve its financial health, raise its share price and sink money into developing new propulsion technologies, such as electric powertrains, autonomous driving technology, cloud computing technology for transportation and other mobility businesses.

Ford shares were down nearly one percent Wednesday morning.

“From Ford's perspective, the metals tariffs took about $1 billion profit from us,” he added. “The irony is, we source most of that in the U.S. today anyways. So we are in a good place right now, but if it goes on longer there will be more damage.”

The trade war is also creating difficulties for Ford's U.S. factories. Ford exports Lincoln vehicles from a plant in Louisville, Kentucky to China, where Hackett said the brand is popular. China's tit-for-tat 25 percent tariff hike, which raises the total duty to 40 percent on U.S. autos, has raised the price of the Lincoln MKC sport utility vehicle in China.

In July, Ford cut its full-year outlook, citing in part heavy losses in China in the second quarter.

“We have had to move people in that factory to other functions because of that trade problem,” he said.

The VW Beetle is dead: Again. Here are 5 other resurrected cars that suffered the same fate

The VW Beetle is dead. Again. Here are 5 other once-resurrected cars that suffered the same fate

Manjunath Kiran | AFP | Getty Images

Robert Ferris | @RobertoFerris

5:20 PM ET Sat, 15 Sept 2018

Occasionally, car companies bring back old nameplates in the hope of stoking nostalgia and giving an old name a fresh new look. But it doesn't always work out.
The revived and redesigned Volkswagen Beetle was apparently one such case. Originally developed at the behest of Adolf Hitler in the late 1930s, the car later achieved astronomical sales figures in the 1960s, and became an icon of the era.
Volkswagen stopped selling the original version in the United States in the late 1970s, but continued to produce Beetles in other countries, then introduced a revived version in the 1990s. The car was a hit with many car buyers: Notably, Hillary and then-President Bill Clinton bought a redesigned Beetle for their daughter Chelsea.
But as sales slowed, Volkswagen decided to pull the plug. On Thursday, the automaker said the production of the car will end next year.
Volkswagen is not alone. Here are some other attempts by car companies to recall the past that did not last.

Comeback

Volkswagen stuck with the new Beetle for roughly two decades, decades but in the end decided it was not worth keeping, as consumers continue to shift into SUVs and crossovers.

Franziska Krug | German Select | Getty Images

Ford Thunderbird

The Ford Thunderbird was a coveted car in the 1950s and 60s. The Beach Boys even referred to the “T-Bird” in one of their hit songs “Fun, Fun, Fun”…

Dean Treml | Getty Images

The 90s version

…But Ford's attempt to release an updated version in the 1990s with retro styling fell flat, and the car was eventually discontinued.

Heritage Images | Hulton Archive | Getty Images

Dodge Dart

Dodge has resurrected a few of its most famous nameplates, such as the Charger, the Challenger, and had tried the same approach with the Dart. The first Dart was an affordable and wildly popular car in the 1960s and 1970s…

Bettmann | Getty Images

Flash forward to 2013

…Fiat-Chrysler brought back the nameplate in 2013 to attract customers looking for small cars. The new Dart probably could not have been much more different from its ancestor, and the car was only in production for a few years. It ended with the 2016 model year.

Bloomberg | Bloomberg | Getty Images

Mercury Cougar

The Mercury Cougar began life in 1967 as a slightly upscale stablemate to Ford's Mustang pony car. It went through several different designs over the years, and slowly morphed into more of a sedate sedan by the time it was discontinued in 1997…

Gabe Souza | Portland Press Herald | Getty Images

Back with a sportier design

…Two years later, though, Mercury brought the Cougar back with a leaner, sportier design with quirky touches, such as bulbous headlights and taillights. It was only in production for a few years before Ford discontinued it.

Scott Olson | Getty Images

Pontiac GTO

One of the original true muscle cars, the GTO was big, loud and fast when it was first released in the mid-1960s. It remained in production for about a decade.

Getty Images

From a land Down Under

Pontiac resurrected the name and slapped it on a modified version of a Monaro, a car made by General Motors' Australian Holden brand. While the redesigned GTO earned praise for its performance, the model was killed after just two years. Soon after that, GM completely ended production of all Pontiac models during its bailout by the U.S. government.

Patrick T. Fallon | Bloomberg | Getty Images

Ford Taurus

When the Taurus was first released in 1985 it was a revelation: A sedan with European styling that could be had at the price of a Ford. It was later replaced with the Ford 500.
That was a mistake, said independent auto analyst and industry veteran John Wolkonowicz. Former Ford CEO Alan Mulally pushed Ford to resurrect the Taurus nameplate.

But the revived Taurus never quite attained the cachet with consumers the original had. Ford has recently said it will discontinue the model in North America, along with nearly all of its other sedans.

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Elon Musk wants Tesla to do collision repairs in-house, blames outside shops for long wait times

Musk wants Tesla to do collision repairs in-house
6:55 AM ET Mon, 17 Sept 2018 | 00:54

Tesla CEO and Chairman Elon Musk on Sunday said the electric vehicle maker will soon bring most collision repairs in-house — a promise he first made during the company's annual shareholder meeting in June.

In a series of tweets on Sunday, Musk blamed outside shops for taking too long to complete repairs.

Specifically, Musk wrote: “Tesla is bringing most collision repairs in-house, as outside firms take weeks to months for repairs, driving Tesla owners (and us) crazy.”

He acknowledged that some collision repair shops are able to turn around a Tesla customer's car after an accident rather quickly.

When Tesla eventually rolls out its own collision repairs service, he said, the goal will be to make each vehicle “better than before accident.”

Musk also suggested that Tesla has an advantage over outside collision repair shops when it comes to timely service. “Outside repair shops are jack of all trades, which means supporting 1000's of makes & models. Tesla collision repair specializes in three,” he wrote. “Having all parts in stock & not waiting for insurance approval also make a world of difference.”

Ron Arth, the owner of Oakland, California, repair shop George V. Arth & Son, told CNBC that he's not sure how Tesla could repair vehicles without waiting for insurance approvals, unless it's willing to do work for free or temporarily carry the cost on its books while it works out approvals. “Collision repair shops have to document everything we do, and justify it in order to get paid for the repairs,” he said.

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“I think the whole concept of Tesla is awesome, ideologically, and a lot of manufacturers are chasing their designs,” Arth said. “But I think they need to revisit how to deal with collision repair shops of any kind, certified, independent, whatever.”

Arth said Tesla's ultimate goal “should be to repair cars safely and correctly for customers wherever they seek service. That way they'll be happy with their cars, long-term. And when they're ready to buy a new one, they'll come back to you.”

When a Tesla comes through Arth's shop, the automaker requires his team to drive to pick up parts from one of its showrooms or service centers, he said. Other major automakers, in contrast, typically deliver parts to collision shops and give them wholesale discounts.

Aftermarket parts for Tesla vehicles aren't widely available, either. No major company manufactures them.

Arth's business fixes about 100 vehicles a month and has worked on at least a dozen Teslas, he said.

Musk acknowledged on Twitter that spare parts are not abundant, but he promised a fix: “Service & parts supply in general will be the top Tesla priority after we get through the insane car delivery logistics of the next few weeks.”

BMW warns of lower profits on new emissions rules and an escalating trade war ‘distorting demand’

Andreas Gebert | Anadolu Agency | Getty Images
A visitor of BMW World walks past a BMW car during the annual accounts press conference of German car manufacturer BMW at the BWM World in Munich, Germany.

BMW said Tuesday its 2018 sales and profits will likely fall due to the costs of implementing new emissions standards in Europe and rising uncertainty stemming from the escalating global trade war.

Automotive revenues are now expected to fall slightly from the 88.6 billion euros ($104.4 billion at the current exchange rate) it generated last year, the company said. It previously told investors sales would rise.

BMW had also previously forecast profits to be on par with last year, but now expects a “moderate decrease,” the company said. The company earned 10.7 billion euros ($12.6 billion at the current rate) in 2017.

“The continuing international trade conflicts are aggravating the market situation and feeding uncertainty,” BMW said in a statement. “These circumstances are distorting demand more than anticipated and leading to pricing pressure in several automotive markets.”

The German automaker also said the industry's shift to a new laboratory test for emissions, the Worldwide Harmonised Light Vehicle Test Procedure, has created “supply distortions in several European markets and an unexpected intense competition.”

BMW had already expected 2018 to be a challenging year, due to the more than 1 billion euros in investments it is making in mobility, along with currency headwinds.

Fellow German automaker Daimler had warned at the end of July that the heightening trade war between the U.S. and China could affect its profitability this year. Both automakers have factories in the United States, where they build vehicles for both the U.S. market and for export.

Luxury electric car maker Lucid is building a charging network with VW in another jab at Tesla

Robert Ferris | CNBC
The Lucid Air Alpha test car, displayed at the New York Auto Show, reached a software-limited 217 miles per hour on a text track in Ohio.

Luxury electric car maker Lucid is building a high speed charging network for electric cars across the United States with Volkswagen, the companies said Tuesday.

According to the deal, VW subsidiary Electrify America and Lucid will build a network of 500 charging sites across 40 U.S. states by the end of 2019.

The deal gives Lucid another leg up against Tesla and signals increasing competition in the luxury electric car segment.

Lucid, which is based in the San Francisco Bay Area, plans to start producing its own upscale electric sedan in 2020.

The company recently upped the ante in the race to catch Tesla after receiving $1 billion investment from the Saudi government's Public Investment Fund. The company's chief technology officer is Peter Rawlings, who was former Tesla's chief engineer, and who worked on the team that developed the Model S sedan.

Robert Ferris | CNBC
The interior of a Lucid Air on display at the New York Auto Show on April 13, 2017.

Legacy automakers such as Jaguar and Volkswagen subsidiary Audi have recently debuted their own high-end electric cars designed to take a piece of the market where Tesla is the most recognizable brand. Tesla is the only other automaker with a dedicated charging network, with 1,344 of its high-speed Supercharger stations around the world.

Volkswagen started the Electrify America program as part of its settlement with the U.S. from its diesel emissions scandal, after it was discovered the automaker used devices to cheat diesel emissions tests. The company agreed to spend $2 billion in the U.S. to promote electric vehicle technology.

The US Secret Service just ordered a Harley-Davidson motorcycle despite Trump’s call for a boycott

Drew Angerer | Getty Images News | Getty Images
President Donald Trump and Vice President Mike Pence walk together on their way to greet Harley Davidson executives on the South Lawn of the White House, February 2, 2017 in Washington, DC.

Less than a month after President Donald Trump called for a boycott of Harley-Davidson Inc. motorcycles, the organization charged with his protection has ordered one.

The U.S. Secret Service Uniformed Division placed an order for a Harley-Davidson police motorcycle last week, a move which documents connected to the order refer to as an organization requirement for “protective motorcade support functions.” That could include protecting the president, who called for a boycott of Harley-Davidson in August in his continued Twitter campaign to discourage his supporters from patronizing the Milwaukee motorcycle company following a June announcement of an overseas production move.

“Many @harleydavidson owners plan to boycott the company if manufacturing moves overseas,” Trump wrote on Aug. 12. “Great! Most other companies are coming in our direction, including Harley competitors. A really bad move! U.S. will soon have a level playing field, or better.”

According to the purchase order documents, Harley-Davidson motorcycles are required for motorcades to ensure the “consistency of appearance, performance, training and parts with the currently existing motorcade motorcycle fleet.” Furthermore, the motorcycle order achieves consistency with the Metropolitan Police and U.S. Park Police in Washington, D.C.

Ordering a different brand of motorcycle would also require the Secret Service to spend time training its support technicians “at a cost of thousands of dollars,” and motorcade support officers would also need training. The Secret Service would have to “duplicate an inventory of spare parts” if the brand was switched as well.

Moreover, the Harley-Davidson police motorcycles come outfitted with a side car, and the Secret Service would need to purchase additional sidecars to equip with a new brand were a switch made.

As for when a switch away from Harley-Davidson could realistically happen for the Secret Service, the document indicates an evaluation could take place “when the current fleet is deemed worn out and economically unviable.” However, the current fleet should last “for years to come” if properly maintained.

Harley-Davidson representatives didn't immediately respond to a request for comment on the order. President Trump hasn't mentioned Harley-Davidson on Twitter since Aug. 12.

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7:20 AM ET Wed, 18 July 2018 | 04:18

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The auto industry’s VHS-or-Betamax moment

5GAA | 5G Automotive Association e.V via AP Images
In this image released July 11, 2018, 5GAA, BMW Group, Ford and Groupe PSA exhibit the first European demonstration of C-V2X direct communication interoperability between multiple automakers.

The auto industry has a choice to make: Which language will cars speak when they talk to one another?

Until a couple of years ago, automakers agreed on one vehicle-to-vehicle communications platform, called dedicated short-range communications, or DSRC, based on the technology used for Wi-Fi. But some car companies have begun to favor a competing protocol, known as Cellular V2X, which is based on a next-generation version of the technology used by your mobile phone.

So far, the federal government has held back on enforcing a standard. A proposed rule mandating deployment of DSRC equipment in new vehicles has languished for nearly two years, and critics say the delay is making motorists less safe. But supporters of the competing standard say something better has come along.

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“You've got public agencies who want to deploy, but we don't have a standard, so what do I buy?” asked Kirk Steudle, director of Michigan's Department of Transportation and a supporter of the DSRC standard. “Betamax, or a VHS?”

It is a crucial technological choice: Cars are increasingly connected, and the autonomous vehicles that will arrive in the future must have a way to communicate with each other and surrounding infrastructure. But even before self-driving cars hit the streets en masse, there are enormous benefits to be had. Federal transportation officials estimate that, once widely deployed, such communication systems will prevent or mitigate up to 80 percent of all non-impaired collisions and address thousands of fatal crashes per year in the United States.

The auto industry is divided over the standards.

General Motors has embraced DSRC, and it's already a standard safety feature on Cadillac CTS sedans. Toyota and Volkswagen have also committed to make DSRC systems standard equipment on new cars beginning next year. On the other side are brands, including Ford, BMW and Mercedes-Benz, that have joined the chip maker Qualcomm, cellular providers and others to form the 5G Automotive Association, which is pushing the C-V2X standard.

Regardless of the standard that's settled on, vehicles will be able to directly communicate with one another, allowing them to warn of collisions even when drivers cannot see each other. And such systems will allow valuable safety information to be shared from other sources: Instead of a sign warning that “bridge ices before road,” the bridge can warn drivers when ice has actually formed, and traffic lights will be able to manage traffic to minimize delays and clear the way for emergency vehicles.

But there are important differences.

DSRC has been around much longer, and most car companies have developed and tested systems based on the standard. The Federal Communications Commission ruled that a chunk of the wireless radio spectrum would be restricted to the DSRC standard beginning in 2003, and in 2016 the Obama administration proposed a rule that would mandate phase-in of DSRC in new cars and light trucks starting in 2021. The National Highway Traffic Safety Administration said systems to prevent collisions at intersections alone could save some 1,300 lives a year.

John Kenney, director of the Toyota InfoTechnology Center, said his company was ready to move ahead with the DSRC standard. “G.M. is online, too,” he said. “Now, there's a potential risk that maybe it's not going to be DSRC. That just impedes deployment.”

Supporters of the C-V2X standard contend that DSRC is nearly two decades old, from a time when companies didn't imagine streaming video to children in the back seat of a crossover, or updating vehicle operating systems from the cloud. C-V2X's advocates say it would allow for more features, be more flexible and could use cellular infrastructure.

“People assume that just because something is here now and they've been working on it for 15 or 20 years, it will be here 15 years from now,” said Jovan Zagajac, technology manager in Ford's Connected Vehicle and Services group and a member of the 5G group's board. “Well, the world has changed.”

BMW's engineers, for example, see safety advantages if cars can communicate directly with personal devices like mobile phones.

“This will make it much easier to retrofit vehicles and also give the benefits of C-V2X to other vulnerable road users, such as cyclists and pedestrians,” said Joachim Goethel, the leader of BMW's 5G connectivity initiatives.

The division runs deep. This month, the Eno Center for Transportation, a nonprofit established by William Phelps Eno, the road safety pioneer whose work led to New York City's first traffic plan in 1909, published dueling opinion pieces on the standards. One was from a Toyota official supporting DSRC and the other from a Daimler official favoring C-V2X.

Despite the Obama-era proposal, which would require all new vehicles to include DSRC by 2023, the federal government hasn't moved to enforce a standard.

Heidi King, deputy administrator at the National Highway Traffic Safety Administration, said the Department of Transportation was “technology neutral” on communication protocols.

“While our past research has centered around DSRC — because that was the only technology available — we are also exploring other technologies, including Cellular V2X,” she said in an email.

The federal government also has authority over a crucial element of any system: the radio frequency on which it operates. Two members of the Federal Communications Commission recently informed Toyota that the agency was looking at “newer technology” — such as C-V2X — for the 5.9-gigahertz band that has been allocated to DSRC.

“By taking a modern look at the possibilities for wireless services in the 5.9 GHz band, we can support automobile safety, increase spectrum for Wi-Fi and grow the wireless economy,” they wrote in a letter to the carmaker.

The mention of “the wireless economy” hints at another crucial difference between the standards: DSRC has little possibility for monetization, while a cellular system offers the possibility of revenue streams through additional data services. The 5G Automotive Association suggests that next-generation infotainment services used by C-V2X — such as movie streaming or conference calls — would improve the passenger experience.

Car and equipment makers have conducted trials of C-V2X, but even its proponents acknowledge that it will take time to roll out, while DSRC is market ready. It's not just automakers that now have to wrestle with the choice: State transportation departments and many local authorities have been installing DSRC-compatible roadside infrastructure for almost a decade.

In January, 12 state and regional transportation officials, including Mr. Steudle of Michigan, formed the Coalition for Safety Sooner to advocate the protection of the 5.9 GHz band for DSRC and the acceleration of efforts to deploy it.

The group pressed its case in a letter to Transportation Secretary Elaine Chao; Ajit Pai, the chairman of the Federal Communications Commission; and Mick Mulvaney, the director of the Office of Management and Budget. The signatories had already installed or committed to install more than 1,000 DSRC-equipped intersections and roadside units, and outfitted thousands of their own vehicles with the technology.

“Waiting for the next technology solution to be developed, tested and proven misses a huge opportunity to potentially save tens of thousands of lives throughout the United States each year,” they wrote.

A recent study published by the University of Michigan Transportation Research Institute calculated the cost of waiting to deploy vehicle-to-vehicle systems. A three-year delay will allow the sale of millions of new cars and light trucks without them, and those vehicles will remain on the road for an average of 15 years. During that time, they would have millions of avoidable collisions, according to the study, which was written by James Sayer, the institute's director, and two other researchers.

The institute helped with one of the first and largest tests of DSRC technology in Ann Arbor, Mich., involving some 3,000 vehicles. Based in part on that experience, Michigan officials require DSRC-compatible hardware in every new traffic signal in the state.

Mr. Steudle, the ..