Tesla is making its controversial driver assistance system available to customers previously deemed unsafe behind the wheel to test it out.
CEO Elon Musk tweeted that the system Tesla calls Full Self-Driving Beta is now available to anyone in North America who has purchased the option and requested it from their car’s screen. Until now, some paying customers didn’t have access to the feature known as FSD because they didn’t score high enough on the metrics Tesla uses to set insurance rates.
FSD has been a lightning rod for critics because the product has failed to live up to Musk’s claims. He first announced his intention to sell it in October 2016, a few months after telling a tech conference that he saw self-driving as “basically a problem solved”. In 2019, he said that within about a year, Tesla’s technology would advance to the point that no humans needed to be behind the wheel.
These predictions did not come to fruition: FSD still requires a fully attentive driver to keep their hands on the wheel and be ready to take over at any time. This disconnect has opened Tesla up to increased legal and regulatory risks:
- The US Department of Justice and the Securities and Exchange Commission have been investigating Tesla’s self-driving claims, a person familiar with the matter said last month.
- A California customer is seeking class action status for his lawsuit filed in September, claiming that Tesla deceptively marketed its driver assistance systems.
- The California Department of Motor Vehicles accused the company in August of misleading consumers about its FSD and Autopilot systems.
It’s unclear whether making FSD available to more customers will impact Tesla generating or recognizing more revenue just after Musk acknowledged that demand for his vehicles has been “a bit higher.” hard to find. The company said it only accrues a portion of the amounts customers pay for the FSD, with the rest allocated to a deferred revenue balance.
“FSD purchases were not fully recognized in Tesla’s P&L because consumers purchased a promise rather than a fully functional product,” said Patrick Hummel, a UBS analyst with a buy rating. on the action, in a note of November 14.
At the end of September, Tesla’s deferred revenue balance was $2.8 billion. While the company then said it expected to recognize $1.09 billion in deferred revenue over the next 12 months, Tesla overstated that figure for years.
Musk has taken advantage of a relatively light-hearted approach to regulating automated driving technology in the United States. The National Highway Traffic Safety Administration said shortly before Tesla’s first fatal crash involving Autopilot in 2016 that existing laws in the country pose few barriers to driver assistance systems.
When asked in March when Europeans could test the FSD, Musk told fans at the factory Tesla was opening near Berlin which the company was waiting for because regulators in the region were less permissive.
“In the United States, things are legal by default,” Musk said. “In Europe, they are illegal by default. So we have to get pre-approval, whereas in the US you can sort of do it on your own, more or less.
The National Highway Transportation Safety Board, which does not have the power to compel automakers to follow its recommendations, has criticized Tesla’s deployment of Autopilot and FSD.
“We basically have the Wild West on our roads right now,” NTSB Chairwoman Jennifer Homendy told Bloomberg earlier this year. “It’s an impending disaster.”
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