The National Highway Traffic Safety Administration (NHTSA) of the United States has asked Tesla to explain how its upcoming driverless taxi (Robotaxi) in Austin, Texas, can avoid accidents, especially in low visibility conditions such as fog and rain. Previously, Tesla’s driving assistance software has been involved in multiple accidents, including the death of a pedestrian, which prompted the NHTSA to launch an investigation into 2.4 million Tesla vehicles last year. Tesla needs to respond to the nine-page inquiry letter from the regulatory agency by June 19th; otherwise, it may face a delay in the release.
Tesla CEO Elon Musk said during the earnings call in April that the Robotaxi service will be launched in Austin as planned next month and plans to roll out millions of self-driving taxis across the United States by the end of the year. Although Tesla’s share price has risen by 45% since then, it has still fallen by approximately 17% cumulatively this year. Analysts point out that the success of Robotaxi is crucial for Tesla to maintain its high stock price, but regulatory reviews and safety issues remain key challenges.
The NHTSA has limited direct regulatory authority over fully autonomous vehicles, but it can exert influence through safety reviews or mandatory recalls. Tesla needs to submit the specific deployment plan, monitoring measures and technical details of sensors for its Robotaxi. Musk once claimed that the autonomous driving experience of “sleeping in the car to the destination” could be achieved by the end of the year. However, if the progress falls short of expectations, Tesla may find it difficult to support its current stock price. In addition, the company’s profit plummeted by 71% in the first quarter, partly due to Musk’s political controversy and the wave of layoffs.
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