Eyeing the future of self-driving cars, Musk’s Tesla settles accident case

San Francisco, United States: Billionaire tycoon Elon Musk’s Tesla has said its future will be centred around Robotaxis, robots and self-driving cars. Musk’s own fortunes, including the promise of a $1 trillion pay package, will depend on the carmaker hitting those milestones over the next decade.

One key feature to achieve some of those goals revolves around Tesla’s ability to offer a fully self-driving service – the company is required to sell up to 10 million subscriptions for self-driving cars as one of the conditions in the proposed trillion-dollar pay package.

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But the reliability of that service is in question for now, as there have been multiple accidents, including in which a person was killed, and the self-driving feature was held at fault, experts said.

That is not a spotlight that Tesla wants, and the company recently settled with the family of a 15-year-old boy in San Francisco who died in 2019 after a Tesla self-driving car hit the car his father was driving, court filings on Monday showed. The family of Jovani Maldonado had alleged that the self-driving car was at fault for the accident.

The settlement came weeks after a Florida jury ordered the company to pay $243m in damages to the family of a female pedestrian who had died in a crash involving a Tesla self-driving car. The jury had reached a verdict that the car was at fault, setting a precedent for cases such as the Maldonados’ case. The company has appealed the Florida verdict.

While Tesla has settled cases in the past, the Maldonado settlement comes at a time when the company’s fourth masterplan, unveiled on September 1, has bet its future growth on the sales of Robotaxis and robots.

Musk said its Robotaxis, currently being piloted in San Francisco, California and Austin, Texas, will be available across many cities across the United States by the end of the year and to half of all Americans. Tesla Robotaxis have safety drivers in San Francisco, but Musk said they would be gone within months if regulatory approvals come through.

The California Department of Motor Vehicles (DMV) has also filed a case saying Tesla wrongly says it is “fully self-driving” when it is only on the second of a five-point scale of self-driving, and its cars need full driver attention on the wheel. The DMV has asked for a one-month ban on Teslas being driven in the state, Tesla’s biggest market in the country. The court verdict is expected next month.

“Musk needs to show a new business model,” said Karl Brauer, an analyst with iseecars.com. The company’s profits as well as sales of its electric vehicles have slid in the past few months owing to increased competition, as well as protests against Musk’s politics and his role with the Trump administration, which he has since stepped back from after a falling out with the president. But sales are likely to dip further as federal tax credits for electric vehicles end on September 30.

While the company is betting on Robotaxis and robots, “these court cases have shown that there are questions around self-driving,” said Brauer. “The reality of self-driving is different from the projections.”

Tesla did not respond to Al Jazeera’s request for comment.

Last-second disengagement

On April 25, 2019, George McGee was driving his Tesla S car in Boca Raton, Florida, when his phone allegedly fell. McGee bent down to pick it up when the car, which had been on autopilot, sped ahead and missed a traffic light, according to court documents reviewed by Al Jazeera.

The car went off the paved roadway and banged into a Chevrolet Tahoe parked in a car park with such force that it spun around the seven-seater SUV, which then hit bystanders Nabeil Benavides and Dillon Angulo. Benavides was flung 75 feet (23 metres) away into a wooded area and died. Angulo suffered injuries.

Benavides’s and Angulo’s families sued McGee, who admitted negligence, but said he thought the assisted driving system would manage the situation rather than disengage. The families also filed a case against Tesla, leading to the historic verdict ordering damages of $243m.

On its website, Tesla says its self-driving cars are likely to have an accident after close to seven million miles of driving, compared with less than one million for regular cars. It says its cars have among the lowest probability of injury of any car tested by the US government.

While it is hard to say whether Tesla cars have more accidents than other such self-driving cars, some experts have said there have been incidents of the assisted driving system disengaging in the last few seconds before a crash, giving the driver little opportunity to take control of the car.

Brett Schreibner, the lawyer who represented the Benavides and Maldonado families among other such cases, said nearly all his cases involve situations of last-second disengagement that did not allow the driver enough time to take charge of the car, causing the accident.

Tesla relies only on cameras rather than using cameras along with radar and lidar (light detection and ranging). If it had three sensors working together to detect other cars or people around, it could shore up safety-related issues, experts have said.

“I am not being prescriptive on what all they should use, but can you do it with just one sensor rather than radar, lidar and camera working together?” said Mary Cummings, professor and director of George Mason University’s Autonomy and Robotics Center.

Cummings testified as an expert witness in the Florida case and has pointed to some of Tesla’s shortcomings in the past.

“No lidar means Tesla has no redundancy, but it is a lot cheaper and so more accessible,” said Scott Moura, director at the University of California at Berkeley’s Energy Controls and Applications Lab. Tesla is priced lower than other self-driving cars, such as Waymo’s, which uses all three sensors.

Michael Barnard, chief strategist with TFIE, a climate and energy consulting outfit, says while he did not think Tesla needed lidar, when it did away with radar in 2021, he thought that was like taking away a “sense”. “While you can drive in some situations, it is harder to drive in fog, in snow or in downtowns”.

According to Shua Sanchez, an MIT researcher, with the Florida verdict, “the door has been opened for Tesla to be held liable for its Advanced Driver Assistance System (ADAS),” which allows the car to move without driver involvement. The California settlement adds to that, he said. Sanchez was involved with the Tesla takedown movement, which saw protests at several Tesla showrooms earlier this year when Musk was still involved in efforts to slash jobs and departments at the US government.

Schreibner, who was seeking up to $1bn in damages from the company for the Maldonado case before settling for an undisclosed amount, said he has similar cases coming up.

Next March, hearings are likely to begin in the case of Sasha Pelletier, a recent college graduate who was about to join the military. He was riding his motorbike on a state highway when a Tesla hit him, causing serious injuries. In that case, too, the Tesla was on autopilot.

These cases “impact everyone’s evaluation of Tesla self-driving,” Shreibner says. He may seek damages of close to $1bn again, which, if awarded, could hurt the company, whose profits were down 16 percent to $1.2bn in the second quarter of 2025.

Musk has said that with tax and regulatory credits ending, Tesla could have “a few rough quarters”. But the company said it was a “seminal point in Tesla history” where it would move its focus to AI, robotics and Robotaxis.

Analysts say the plan lacks specifics, including how Tesla would combat safety-related concerns on its Robotaxis.

Musk, while speaking on the As In podcast on September 9, said the company was developing a new artificial intelligence chip that would be 40 times better than the one it currently has. The company is also coming up with a software upgrade which will make its self-driving cars at least two to three times safer than human-driven cars and possibly up to 10 times safer than human-driven cars.

Musk also noted that he was speaking not from Washington, DC, but from Tesla’s Palo Alto campus, where he was spending time on the development of the new chip, among other projects.

‘He will want to settle’

A verdict on the California DMV’s case with Tesla is likely to come in October unless a settlement is reached, as is expected by some state energy experts.

“California has the most sophisticated standards for self-driving,” said Berkeley’s Moura. “We are the test labs for the world, and people will be watching for what California does.”

Given the questions surrounding its self-driving capabilities, Steve Larson, former executive director of the State Energy Commission of California, said Musk will want the certification and ability to drive in the state.

“If California recalls Tesla, others could also do so. He will want to settle,” Larson told Al Jazeera.

However, it is still a while before Robotaxis and self-driving cars really take off, analysts have said. Brauer of iseecars.com said the move to fully self-driving on a large scale could take a longer time horizon than Musk and others in the industry foresee.

In a research report for the brokerage firm Baird last week, Karl Bello, a senior analyst, wrote, “We see the inflection points for reaching scale in both [Robotaxis and robots] as being farther away than many believe.”

Bello also wrote that he believed the master plan and Musk’s own salary would be the centrepiece of a shareholder meeting to be held on November 6.

“And even if he does meet all his plans, it’s not like competition is in the same place,” Brauer told Al Jazeera. “In fact, Waymo and some others are already ahead.”