A California bill targeting Tesla’s (NASDAQ: TSLA) Full Self-Driving program was passed by the Senate on Tuesday night.
The bill, sponsored by Senate Transportation Committee Chair Lena Gonzalez (D-Long Beach), addresses the issue of the electric vehicle maker marketing the vehicle as “full self-driving,” implying in plain English that the car can be completely autonomous, when it can not.
In a 2018 survey, the AAA Foundation for Traffic and Safety found that 40% of people who purchased the driver-assist option, such as Autopilot, the lower-tier version of Full Self-Driving, assumed that the car can indeed drive itself. There is currently no car in the market that can fully self-drive, but only Tesla is marketing this way.
“Are we just going to wait for another person to be killed in California?” Gonzalez said in an interview with the LA Times, alluding to instances of deaths linked to Tesla’s Autopilot. It is still unknown how many incidents can be connected to Full Self-Driving.
The new legislation limits its scope to the way the feature is advertised and does not tackle the safety of the technology. The new law also requires carmakers to clearly explain the capabilities and limits of partial-automation technology when a new car is delivered and when software is updated.
It has yet to be determined how it will impact Tesla. The state’s Department of Motor Vehicles will be the agency responsible for enforcing the new law.
DMV, while they have yet to comment on the new legislature, already has rules that ban false advertising of “self-driving” vehicles, and has launched a review of Tesla’s claims in May, months before the Gonzalez bill’s passing, but it has yet to enforce these rules.
Information for this briefing was found via The LA Times and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.