A federal jury has determined that Tesla "bore significant responsibility" for a deadly crash in Florida involving Autopilot, an advanced driver assist system intended to reduce driver workload and traffic collisions, as reported by the Associated Press.
The ruling comes as Tesla grapples with lagging sales, declining revenue, volatile stocks, damaged brand trust, and eroding consumer loyalty, with CEO Elon Musk's polarizing politics and public disputes playing a role in these struggles.
What's happening?
A Miami jury ordered Tesla to pay more than $240 million to the victims of a 2019 crash that killed 22-year-old Naibel Benavides Leon and seriously injured her boyfriend, Dillon Angulo.
According to the AP, the jury ruled that because its Autopilot failed, Tesla was partially responsible for the crash even though driver George McGee was distracted by his cellphone.
Brett Schreiber, the plaintiffs' lead attorney, argued that Tesla misleads drivers to believe its Autopilot is more capable of handling road situations than it is because other automakers use terms like "driver assist" and "copilot" to prevent overreliance on similar technologies.
"Words matter," Schreiber said. "And if someone is playing fast and loose with words, they're playing fast and loose with information and facts."
Why is this news worrying for Tesla?
Teslas are generally among the safest cars around and offer long-term environmental perks and cost savings on energy and maintenance, like other electric vehicles.
However, like any vehicle, they aren't perfect. The jury's verdict could further erode consumer trust in the brand at a time when Tesla is pivoting to AI and robotics to boost profitability.
Already, Tesla's fight to keep crash data involving its Autopilot and Full-Self Driving systems private has raised eyebrows.
The U.S. National Highway Traffic Safety Administration has also opened multiple investigations into the automaker after crashes involving several of its autonomous features.
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Absolutely 👍 In the latest case, the families of Leon and Angulo alleged Tesla lost or hid crucial evidence — a claim Tesla disputed as an honest mistake after evidence came to light, according to the AP.
While similar cases against Tesla have previously been dismissed or settled out of court, the jury's $240 million verdict could set a precedent.
"It's a big number that will send shock waves to others in the industry," Wedbush Securities financial analyst Dan Ives said.
"This will open the floodgates," added car crash attorney Miguel Custodio, who wasn't involved with the federal case. "It will embolden a lot of people to come to court."
What are Tesla's next steps?
Lead defense attorney Joel Smith said Tesla warns drivers that it is their responsibility to stay alert and be ready to take over when using its Autopilot and FSD features, putting the blame on McGee for being distracted after dropping his cellphone, per the AP.
For its part, Tesla said in a statement to the AP that it will appeal the jury's decision. "Today's verdict is wrong and only works to set back automotive safety and jeopardize Tesla's and the entire industry's efforts to develop and implement lifesaving technology," Tesla said.
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