Tesla is in trouble over NHTSA safety claims, stocks down

Tesla has been keen to highlight the safety aspects of its Model 3 to make it more appealing to customers. However, the U.S. National Highway Traffic Safety Administration (NHTSA) ended up sending Elon Musk a cease-and-desist letter over a blog post which extolled the car’s perfect 5-star safety rating.

Newly published documents reveal that the NHTSA wrote a letter to Tesla on October 17, 2018, claiming that its blog post contained misleading statements.The NHTSA also said that it would be referring the matter to the Federal Trade Commission’s Bureau of Consumer Protection to investigate further. Tesla responded by October 31 countering the NHTSA’s claims and ultimately signed off saying that it saw no reason to take the blog post down.

One of the major issues NHTSA saw in Tesla’s blog post was that Tesla was using the results to compare its car against other vehicles. It said cars with more mass colliding with ones of a smaller mass have a greater chance of “survivability and injury avoidance” and to say that Tesla’s midsize sedan has a lower probability of injury than an SUV is incorrect.Therefore, saying the Model 3 is safer than other vehicles could mislead the public. Such comparisons are against the guidelines set out by NHTSA.

The newly released documents, obtained via a freedom of information request, also mention several crashes that have occurred in Tesla vehicles, including one fatality while a Model 3 was on Autopilot.

The firm was rumoured to be upping the prices of its cars in China due to uncertainty around the country's currency. It’s not clear which piece of bad news is causing it today, but Tesla’s stocks are down.

Source: Bloomberg

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