The world breathed a sigh of relief this week after Elon Musk announced he is stepping aside as the CEO of Twitter to devote more time to Tesla. But what about actual Tesla product news?
Tesla Automatic Updates And Battery Range
Reuters reports that a group of Tesla Model S and Model X owners in the US filed a proposed class action lawsuit against the company in federal district court in San Francisco on May 12. They claim that automatic over-the-air updates to their cars have decreased the driving range of their vehicles or contributed to battery failures. The lawsuit says Tesla’s automatic updates and their effects violate state and federal laws because they can cut driving range by up to 20% and can require some owners to replace batteries at a cost of $15,000.
The suit raises some novel legal arguments. The outcome could potentially affect other manufacturers who have followed Tesla’s lead in making over-the-air updates possible for their cars. Until Tesla pioneered the idea, if a car needed an update after it was delivered to a customer, the driver had to make an appointment with a local dealer, take time out of work, drive to the dealership, and wait several hours while the service department performed the needed update.
Tesla pushed the idea that its cars were really computers on wheels and could be updated wirelessly whenever necessary, which potentially means every Tesla ever made can automatically be equipped with the same software installed in cars coming off the assembly line this week. That can save owners a lot of time and aggravation. It can also keep the value of used cars higher because there is little difference in how a two-year-old Tesla operates compared to a car that is two weeks old.
This latest lawsuit claims that Tesla vehicles are “protected computers” pursuant to the Computer Fraud and Abuse Act and that automatic over-the-air updates violate consumers’ rights under that law. You can readily see how the outcome of this legal action could have a direct impact on the entire auto industry, which has fully embraced the concept of making cars that can be updated continuously during their lifetime. The suit claims automatic updates also violate the California Unfair Competition Law and the Consumer Legal Remedies Act.
“Tesla owners and lessors are uniquely at the mercy of the maker of their cars, and Tesla imposes software updates without consent whenever their vehicle is connected to Wi-Fi,” said Steve Berman, an attorney with Hagens Berman, the law firm representing Tesla owners and lessors in the lawsuit.
The emphasis here is on automatic updates. Typically, owners are asked to accept new updates, but if their cars are connected to the internet via Wi-Fi, Tesla can push updates to them without prior approval. The suit claims some owners have paid others up to $750 to reverse software updates that affect the batteries in their cars.
In July 2021, Tesla agreed to pay $1.9 million to settle claims a software update temporarily reduced maximum battery voltage in 1,743 Model S sedans, including about $400,000 in attorneys’ fees and expenses. Owners of the vehicles received $625 each, which was “many times the prorated value of the temporarily reduced maximum voltage,” according to a court filing.
China Orders Tesla Recall
That over-the-air update capability may come in handy for Tesla in China. Reuters also reported this week that the State Administrator for Market Regulation in China has issued a product recall for 1.1 million Teslas. The recall requires Tesla to restore a feature that allows drivers to disable regenerative braking. The update will begin May 29 and will restore the option of switching off regenerative braking. It will also warn drivers when they step hard on the accelerator pedal.
Apparently, some drivers are confused by “one-pedal driving,” a feature of many electric cars. When the accelerator is released, the electric motor that powers the car turns into a generator that sends electricity back to the battery to boost range. But some drivers apparently do not understand the process and think if they need to brake harder, they should press the accelerator. We sophisticates may snicker at such behavior, but “sudden unintended acceleration” is a real thing and it can be damn scary if it happens to you.
“I view a software update ‘recall’ as fairly mild relative to major recalls where customers have to take their cars to get serviced to fix an equipment issue,” Seth Goldstein, an analyst at Morningstar, told Reuters. The National Highway Traffic Safety Administration said on Friday it “is aware of the recall in China and is gathering more information from the manufacturer.”
Court Is Skeptical Of Musk Memory Claims
Finally, in other Tesla news this week, a judge in California who is presiding over a lawsuit filed by the heirs of Walter Huang ruled that Elon Musk may be interviewed under oath about whether he made certain statements regarding the safety and capabilities of the carmaker’s Autopilot features.
Huang died in a crash in 2018 while driving a Tesla. His family contends the car’s software failed. The company contends he was playing a video game on his phone at the time of the crash and disregarded warnings from the Autopilot system.
Attorneys for the plaintiffs want to depose Musk regarding recorded statements he allegedly made that tout the capabilities of Autopilot. Attorneys for Tesla opposed the request to depose Musk. They told the court Musk cannot recall the details of his statements that the plaintiffs want to ask him about. They added that Musk, “like many public figures, is the subject of many ‘deepfake’ videos and audio recordings that purport to show him saying and doing things he never actually said or did.”
The plaintiffs’ attorneys want to question Musk about a 2016 statement in which he allegedly said, “A Model S and Model X, at this point, can drive autonomously with greater safety than a person. Right now.” The plaintiffs also claim that Musk finalized the details of a 2016 promotional video that states, “The car is driving itself.” The video displayed some features that did not exist at the time, the plaintiffs said, citing multiple Tesla engineers.
Judge Evette Pennypacker tentatively ordered a limited, three-hour deposition where Musk could be asked whether he actually made the statements on the recordings. Such temporary rulings are common in California courts and are rarely modified substantially. The case is scheduled to go to trial on July 31.
The judge called the arguments by Tesla’s attorneys “deeply troubling. Their position is that because Mr. Musk is famous and might be more of a target for deep fakes, his public statements are immune,” Pennypacker wrote. She added that such arguments would allow Musk and other famous people “to avoid taking ownership of what they did actually say and do.”
The Takeaway
What we can learn from the news this week is that the whole “cars as computers on wheels” concept can cut both ways. On the one hand, it frees manufacturers to update their products after they leave the factory very inexpensively. On the other hand, manufacturers may not be free to make any changes to a car’s software they want to.
There are broader issues in play here, things like right to repair and who actually owns what in those shiny new “computers on wheels.” The courts may have the final word on those issues.
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