Tesla Crash Kills 2 in Texas

A Tesla Inc. (NASDAQ: TSLA) Model S sedan ran off the road Saturday night and hit a tree, killing the two occupants of the car. The crash occurred at about 11:30 p.m. in The Woodlands, an upscale suburb near Houston.

A Harris County official told Bloomberg that the car ran into a tree while traveling at high speed and failed to navigate a turn. Physical evidence and the position of the victims suggest that “no one was driving the vehicle at the time of impact.” The investigation is continuing, and neither Tesla nor the National Highway Traffic Safety Administration (NHTSA) has commented on the crash.

Tesla has been issuing upgrades to its Autopilot autonomous driving feature and, on a more limited basis, a collection of features it has been promoting as full self-driving (FSD).

On the company’s website, the company warns that neither Autopilot nor FSD gives the vehicles fully autonomous capability: “Autopilot and full self-driving capability are intended for use with a fully attentive driver, who has their hands on the wheel and is prepared to take over at any moment.”

While the investigation of Saturday’s crash has not yielded a verdict yet, Tesla has been criticized for marketing its self-driving features under the “misleading and potentially dangerous” term “Autopilot.” Consumer Reports magazine called on the company to drop the term in May of 2016 following a fatal crash.

Other critics say that Tesla does not sufficiently warn drivers of the limitations of the system. The NHTSA has not yet adopted any regulation on how companies claiming to offer self-driving features must ensure that the system is being used properly.

Tesla has argued that because the self-driving features require the vehicle to be under human control, no regulation is needed.

According to a report from Reuters last month, the NHTSA has opened 27 investigations in Tesla crashes. Despite the company’s instruction that drivers must have their hands on the steering wheel and be prepared to take over control of the vehicle, some drivers have reported that “they are able to avoid putting their hands on the wheel for extended periods when using Autopilot.”

Tesla’s stock traded down about 2.4% in Monday’s premarket session, at $722.00 in a 52-week range of $134.76 to $900.40. The 12-month price target on the stock is $649.16.

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