Tesla Reported Fatal Crash To NHTSA Just 9 Days After Incident, But Raises Investor Questions

Tesla Autopilot

JUL 7 2016 BY MARK KANE 48

Tesla Model S On Autopilot

Tesla Model S On Autopilot

Media and analysts closely follow the Tesla Model S fatality crash with engaged Autopilot. We have already saw detailed Police diagram of accident.

Digging deeper, it turns out that Tesla told regulators about the particular crash 9 days after accident, while in the blog post we previously read “immediately“:

“Following our standard practice, Tesla informed NHTSA about the incident immediately after it occurred.”

The Model S crashed on May 7. Tesla disclosed the incident to the government on May 16. The National Highway Traffic Safety Administration announced the probe later on June 30.

Whether it’s that much important that there was a 9 day period between the accident and notification, we aren’t sure? Automotive News notes that Tesla was legally obligated to only disclose the fatality to regulators during its subsequent third quarter.

Well, some say that Tesla should act immediately regardless of the safety issue, because investors interested in the latest stock offering had the right to know about what was happening with one of key Tesla technologies – Autopilot.

Tesla reported the crash privately on the 16th to the NHTSA, but chose to not publicly disclose it ahead of a May 18/19th new stock offering to fund the Model 3 saying it wasn’t of consequence.

“Autopilot is one of the most advanced and most promoted Tesla technologies and is still in beta or test mode. That has spurred questions — including a report by Fortune magazine — over whether the company and regulators should have informed the public earlier of the fatality.

On Tuesday, Tesla CEO Elon Musk tweeted in response to the article about the timing of the disclosure that the May fatality “wasn’t material” to Tesla.

Tesla raised at least $1.46 billion from investors on May 18-19 with a stock offering, as the Autopilot investigation was unfolding.

The company knew of the crash by the time of the capital campaign. But its own investigation was not yet complete and it had not yet been informed by the government of its probe, according to a timeline described by a Tesla spokeswoman.”

Thankfully, calming the issue somewhat, is the fact that Tesla’s market cap has been most unchanged despite some ups and downs between May 18th, the investigation announcement and today – and never moved significantly on any of the news.

TSLA closed on the day of the offering (May 18th) @$211.17, and at $212.29 on the date the NHTSA investigation into Autopilot was announced (June 30), and closed today (July 7th) @$215.94.  So perhaps Mr. Musk was right about it not being material, however the debate on whether or not that was the company’s call is still open for debate.

source: Automotive News

Categories: Tesla

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48 Comments on "Tesla Reported Fatal Crash To NHTSA Just 9 Days After Incident, But Raises Investor Questions"

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How about you keep this site about electric cars… and keep out of the business side of it.

Investors are clearly not interested in this issue. Have you seen the stock price? Doing nothing but climbing.

The only “investors asking questions” are short sellers. NOT the type who are concerned with the business of Tesla… they just want to buy shares and make them go down.

Probably because if the business side fails, EV’s fail.

They can’t just be “green”…they have to make someone money, or no one will build them.

The business side is vital.

Deal with it.

Actually that is not the way short-selling works, though I take your point.

Shorts don’t buy shares, they borrow them…
And the stock is not going up for the reasons you mention. It’s because the price of borrowing shares is increasing, and that’s because of the lack of shares to borrow… not because investors don’t care…

i too feel a bit uneasy about stock market commentary being posted in this forum. it just gives the sense that the relationship between tesla motors and insideevs might a bit closer than it should be.

if the article reported that tesla has provided insufficient notice to the nhtsa or to tesla investors, i wouldn’t have had any objection. but this article offers no evidence that tesla did either. but the stock market commentary WAS bothersome. for example, the language in this article: “Thankfully, calming the issue somewhat, is the fact that Tesla’s market cap has been most unchanged”; is *completely* inappropriate.

What is the average reporting period for say Ford or GM?

GM took over a __DECADE__ to report issues with their ignition switches. And that issue is known to have killed more than one person:

http://money.cnn.com/2014/02/21/autos/gm-deadly-ignition-delay/

So, NINE DAYS for Tesla, isn’t too bad– when judged against actual historical data from Legacy Automakers and their well documented coverups.

And VW moved how much, after 9/18/15?

“The company knew of the crash by the time of the capital campaign. But its own investigation was not yet complete”.

Anybody arguing they should have disclosed this, needs to show the SEC filings from every other car maker, where they disclosed every car accident in their cars, BEFORE they even completed any investigation into each accident.

That would be millions of accidents over the years. Just show us all of those SEC filings before you start your Tesla bashing.

Some people want Tesla to fail in a bad way ! I wonder who’s agenda they’re trying to fulfill …

Abc news asks…”More than 41,000 deaths were recorded on American roads last year. Experts say American drivers break road rules, are frequently distracted and aren’t often trained to handle emergency situations. In European countries with faster, safer roads, people wonder: Are Americans just bad drivers?”

In my experience, 20 years courier work, backed up by statistics, I definitively
would answer that question in the affirmative.
To me it seems to get a bit worse every year, apparently few view the song of the Boss, as a warning concerning what cars are: “Suicide Machines”, as merely entertainment and not a dire, accurate, specific, warning.

Baby we were born to run, but hopefully not over other cars, bikes, and people.
People need to chill, not kill, when driving.

https://www.youtube.com/watch?v=IxuThNgl3YA

scott franco (No M3 FAUX GRILL!)

So in general I would like to stay out of this one, because I am a programmer. However, to me this shows the issues of active vs. passive detection, ie., the cameras Tesla uses via the 360 degree Lidars that google uses. There is always going to be something that can fool a camera. With Lidar, it would have to be a mirror (google car collides with mirror truck).

Lidars have sharp distance limits, but its adequate for cars (I looked into Lidar for airplanes, it does not work over the required distance of a mile or more).

Scott, I think programmers like you and me, who know the limitations of optical object recognition software, ought not to stay out of it. I, for one, find it very troubling that Tesla (and perhaps other auto makers) are depending on the inferior, failure-ridden tech of optical recognition software for detecting other vehicles on the road, rather than the superior scanning lidar tech which Google is using for its self-driving cars.

Yeah, scanning lidar is more expensive. But isn’t protecting human lives worth the expense?

Its not only the companys but also the consumer.

If you have two cars, one with lidar (more expensive, say 2000$) and the same car just equiped with a camera. Because of price difference the expensive lidar car sells 2000 times (saving 10% = 200 lives) and the camera car sells 10.000 times (saving 2% = 200 lives)

Its not only the companys but also the consumer.

If you have two cars, one with lidar (more expensive, say 2000$) and the same car just equiped with a camera. Because of price difference the expensive lidar car sells 2000 times (saving 10% = 200 lives) and the camera car sells 10.000 times (saving 2% = 200 lives).

Which is better at saving lives???

Fortune reported that one expert in securities law believes that news of the death is material and Tesla should have disclosed it earlier. Has any expert in securities law gone on record and sided with Tesla, stating that news of the death is immaterial and that there was no need for Tesla to disclose it earlier?

From the Fortune article:
“John Coffee, a law professor at Columbia University and an expert in securities law, says he believes the company should have disclosed news of the death earlier, and the fact that the stock didn’t fall following the news of the crash doesn’t prove the event wasn’t material and shouldn’t have been disclosed. He says since Tesla’s shares are under the influence of a large controlling shareholder, namely Musk, you shouldn’t read too much into its stock movements. ‘I think it is material as that death has changed both the public’s and the insurance industry’s perception of self-driving cars,’ wrote Coffee in an email to Fortune.”

http://fortune.com/2016/07/06/tesla-autopilot-crash-material-ceo-elon-musk/

Sven…

Maybe you didn’t know that ‘Fortunate Magazine’ also takes money from the Koch Bros., to run hit pieces on Tesla?

http://electrek.co/2016/03/07/koch-bros-assault-electric-vehicles-begins/

Quoting Koch Propaganda serves the discussion no worthwhile purpose, except to perpetuate and spread their anti-Tesla FUD.

PLEASE research your sources before you get accused of being either an unwitting pawn in their negatively-based manipulation of the facts, or that you’re actively working with them.

Have the Koch brothers gotten to the Columbia University law professor quoted in the article? Is he also on the take?

If you ask me, the law-professor/securities-law-expert made a very convincing case when he said: “I think it is material as that death has changed both the public’s and the insurance industry’s perception of self-driving cars.”

Harvard Business School professor and Goldman Sachs board member Bill George disagreed with Elon Musk’s contention that disclosing the death of a Tesla driver using the company’s auto-pilot feature was “not material” ahead of the Tesla selling $2 billion in stock. Please note that Goldman Sachs is one of the two banks that acted as lead joint book runners for Tesla’s stock offering.

Bill George made the following tweet:

“How can Elon Musk possibly justify NOT disclosing deaths from self-driving Tesla autos prior to $2 B ”
— Bill George (@Bill_George) July 7, 2016.”

http://www.businessinsider.com/bill-george-tesla-disclosure-tweet-2016-7

Let’s see, in the past 2 days alone sven as quoted Niedermeyer and now Fortune Magazine and that paradime of integrity–Goldman Sachs, aka the Great Sucking Vampire Squid:

http://www.forbes.com/sites/jakezamansky/2013/08/08/the-great-vampire-squid-keeps-on-sucking/#79c173bc3ddd

How about an article about these driver assist systems:

http://cleantechnica.com/2016/07/07/tesla-autopilot-superiority-highlighted-motor-trend-tests-buried-bottom-article/

I don’t know how you can use Forbes as a legitimate news source when Forbes employs one half of the dreaded DailyKanban writing duo: Bertel Schmitt.

http://www.forbes.com/sites/bertelschmitt/#19a3762d18de

Perhaps you missed the question in my original comment, so I’ll repeat it again.

Has any expert in securities law gone on record and sided with Tesla, stating that news of the death is immaterial and that there was no need for Tesla to disclose it earlier?

As always, I’m looking forward to your reply Get Real. 😀

Bertel Schitt IS a lying POS tool as seen here:

http://cleantechnica.com/2015/10/28/journalist-who-announced-hed-eat-a-hat-if-tesla-autopilot-worked-decides-mmm-nah/

If Forbes doesn’t work for you here is another site:

http://www.businessinsider.com/matt-taibbis-vampire-squid-take-down-of-goldman-sachs-is-finally-online-2009-7

As far as Tesla and the crash all one has to do is contrast that with the GM ignition switch which they covered up for a decade if you are looking for something real.

Why don’t you go troll under some other bridge and leave us readers at InsideEvs free from your witch hunt/conspiracy theories driven by whatever anti-Tesla agenda is driving you.

So the answer to my question is no. You could NOT find even one expert in securities law who sided with Tesla and said that news of the death is immaterial and that there was no need for Tesla to disclose it earlier.

The last sentence in the InsideEVs article above stated: “So perhaps Mr. Musk was right about it not being material, however the debate on whether or not that was the company’s call is still open for debate.”

I looked around and found two experts in securities law who are Ivy League professors, one a law professor at Columbia Law School and the other a professor at Harvard Business School. Both of them said news of the death is material and Tesla should have disclosed it earlier.

If the stock purchasers bring a shareholder lawsuit against Tesla, the main issue will be whether news of the death was material information that Tesla should have disclosed to the stock purchasers.

Rather than discus whether news of the death was material, you tried to sidetrack and obfuscate the conversation by carpet bombing my with an anti-GM, anti-Fortune, anti-Goldman-Sachs rants about how everyone is conspiring to get Tesla.

Sigh.

Sven — No, the burden is NOT on everybody else to prove a negative. It is YOUR obligation to prove there was a violation. This comes out of the basic principle of our legal system of being innocent until proven guilty. So if you are going to libel Tesla and assert they broke the law, it is entirely your burden. No, the issue is not still up for debate. Anybody suggesting that Tesla issue an SEC disclosure based on any single accident, needs to show precedent in the automotive industry of ANY car company doing an SEC disclosure based upon ANY single traffic collision. Much less just days after the collision. This has NEVER happened ever by any car maker. There simply is no obligation to issue an SEC disclosure document after every car accident. My source is every single lawyer from every single car manufacturer throughout the history of the auto industry, who have all came to the same conclusion. If you can provide ANY evidence of any other car maker having issued a revised SEC “Risk Factors” section based upon a single car accident, post it. Stop trying to shift the burden to everybody else to prove a… Read more »

Nix,

You’re confused. We’re not talking about Tesla “issuing an SEC disclosure” in their required filings with the SEC. We’re talking about Tesla failing to disclose “material nonpublic information” to the purchasers of Tesla’s stock in the Prospectus for Tesla’s secondary stock offering.

Tesla has a duty to inform potential purchaser of its stock in a secondary stock offering of material information, so that the purchasers can make an informed decision on whether to purchase the stock.

Elon Musk’s contends that disclosing the death of a Tesla driver using the company’s auto-pilot feature was “not material” ahead of the company selling $2 billion in stock. The two Ivy League professors who are experts in securities law, disagree with Musk and contend that news of the death was material and should have been disclosed to the purchasers of Tesla’s stock in the Prospectus for Tesla’s secondary stock offering.

http://www.businessinsider.com/bill-george-tesla-disclosure-tweet-2016-7

FYI, innocent till proven guilty applies to criminal cases, a shareholder lawsuit would be a civil case where the standard of proof is “a preponderance of the evidence” and where you found liable/not-liable, rather than guilty/non-guilty.

Sven, Furthermore, Tesla has ALREADY disclosed potential product failure as a potential Risk Factor in their 10-Q, so they have absolutely no further obligation to file a revised 10-Q: http://ir.tesla.com/secfiling.cfm?filingID=1564590-16-18886&CIK=1318605 “If our vehicles or other products that contain our vehicle powertrains or battery packs fail to perform as expected, our ability to develop, market and sell our electric vehicles could be harmed. If our vehicles, vehicles that contain our powertrains or our Tesla Energy products were to contain defects in design and manufacture that cause them not to perform as expected or that require repair, our ability to develop, market and sell our products could be harmed. For example, the operation of our vehicles is highly dependent on software, which is inherently complex and could conceivably contain defects and errors. Issues experienced by customers have included those related to the software for the 17 inch display screen, the panoramic roof and the 12 volt battery in the Model S and the seats and doors in the Model X. Although we attempt to remedy any issues we observe in our vehicles as effectively and as rapidly as possible, such efforts may not be timely, may hamper production or may not be… Read more »

We’re talking about the disclosure of material information to purchasers of Tesla’s stock in its secondary stock offering. See my comment to you above.

IMHO you could have stopped at stating (correctly) that sven quoted that most infamous of professional Tesla bashers, Niedermeyer. And if that’s not bad enough, he followed that up with a link to where Niedermeyer actually posted — get this — a disclaimer in which he claimed he had never shorted Tesla stock! And his disclaimer, which was posted to Daily Kanban, rather than in any legally binding venue, claimed it was “under threat of perjury”!

Well, I guess that will fool the exceptionally naive…

sven has made it crystal clear that his agenda — it’s certainly not a hidden agenda anymore — is to bash Tesla wherever and whenever he can, every day and as many times as possible. Even to the extent of continuing to cite a bald-faced smear campaign like the one Niedermeyer created about a fictional problem with Tesla’s suspension systems. Continuing to cite that even after it was made crystal clear that smear campaign was mainly based on the ravings of a lunatic… one who claims the controlled landings of SpaceX rockets (another of Elon Musk’s companies) were faked!

So in other words, you can NOT find any expert in securities law who stated that the news of the death was material. Instead, you launch into your usual “he’s a FUDster” spiel, complete with handwaving. You’re a one-trick pony.

Niedermeyer wrote a story about Tesla requiring nondisclosure agreements when they performed goodwill repairs. NHTSA said that was very troubling. As a result of Niedermeyer’s article, Tesla then said it was changing its ways and would no longer require customers to sign nondisclosure agreements when goodwill repairs were performed. NHTSA hasn’t cleared Tesla, and is still evaluating whether the Model S suspension has a problem.

immaterial, not material

“You say potato I say potatoe.” -Dan Quayle

I suppose it makes sense as you want a vp that is dumber than you, and DQ, fit the bill.

Oops, I meant to say immaterial, instead of material. LOL!

Not to put too fine a point on this, but you obviously have no idea who Carol Loomis is. Thinking she might in any way be influenced by the Koch brothers would be funny if it weren’t so sad.

I don’t know who Carol Loomis is, either. But I certainly know enough not to believe anything posted by someone who, like you, posts nothing but Tesla bashing FUD.

Carol Loomis is a one of the world’s most venerated financial journalists. She worked as a financial reporter at Fortune for 60 years until her semi-retirement in 2014. She was the person who coined the phrase “hedge fund” in an article she wrote in 1966.

“In the 1960s, she wrote one of the first articles about hedge funds. She reported two cover articles on the risk of derivatives in the mid-1990s, long before those instruments contributed to the near-collapse of the global economy. A 1999 piece, ‘Lies, Damn Lies and Managed Earnings,’ presaged the wave of accounting scandals a few years later.”

http://www.nytimes.com/2014/07/04/business/media/carol-loomis-editor-for-warren-buffett-leaves-job-after-60-years.html?_r=0

…and of course publishers never influence the stories their writers cover. It’s the expertise fallacy. The beauty of it is, is that it is difficult to argue against, it’s also a sign of laziness. Example: doctors (experts on health) touting the benefits of tobacco, and many products since. 4 out of 5
Fortune magazines believe that Tesla will fail.

So, you can always find an expert to support your position, so you can’t fail, because you have experts on your side, and the other side are not experts so a priori they are wrong.

It appears sven has a very severe case of TES*, as he is posting at least one Tesla bashing comment to every single article at InsideEVs which is in any way related to the value of Tesla’s stock.

If one didn’t know better, one might almost suspect sven is heavily invested in shorting Tesla stock…

*Tesla Envy Syndrome

“Tesla envy happens when other people have, ahem, long positions and yours is too short.” — Jim Whitehead

This stock stuff is stupid

I walked into class earlier and my teacher was bad mouthing Tesla about this

That woke me up and I had some stuff to say to him lol

GFU, although expect a poorer grade. Probably worth it though. Speak truth to power. It’s the only way they will learn.

Of course this was material — Tesla’s own 10Q says that. And of course Tesla didn’t disclose because disclosure might have interfered with its secondary stock offering.

Claiming Elon Musk has more credibility than Carol Loomis is like saying Donald Trump is more honest than Mother Teresa. Hard to say and keep a straight face.

As a FYI, since a thousand factors affect stock prices, the market cap argument is ridiculous. No reasonably well informed person would subscribe to it.

For those saying the “stock stuff” is stupid, Tesla doesn’t have a viable business model, so it can only exist based on funding from “stock stuff”.

DonC said:

“Tesla doesn’t have a viable business model…”

Snort! 😆

I didn’t realize I was reading yet another Tesla bashing post from someone suffering from TES until I read that sentence. Then I glanced up at the screen name and saw, of course, that it’s yet another post from one of our resident permanent Tesla short-selling FUDsters.

Right, Tesla “doesn’t have a viable business model”. Lessee… didn’t financial analysts used to say that about Amazon.com? Funny, they don’t say that any longer…

Go Tesla!

Too bad that InsideEVs is posting so many stock-related Tesla article. Those attract comments from those suffering from TES like flies are attracted to… manure.

This story reported Tesla/Elon responded correctly to the model S crash.

In this case, according to Galloway, Tesla did three things right:

It acknowledged the problem in a blog post on its websiteThursday.Had the top guy address the matter head-on.And it overcorrected; reiterating Autopilot’s limitations, and reminding drivers to stay alert, even with the feature activated.

“Who did this terribly? It was General Motors,” Galloway said, referring to the company’s handling of a massive ignition defect that led to the deaths of more than 100 people. GM was hit with a $900 million penalty as a result.

http://www.businessinsider.com/how-the-tesla-autopilot-crash-affects-the-tesla-brand-2016-7

I wonder why the truck driver did not sound his horn. I mean he had enough time to think why is that guy barreling down the hill towards me, he must be asleep. In other words at least a number of seconds 4 or 5. He pushed down on the accelerator, he should of thought to alert the other driver, but failed too. We all tend to panic, in emergency situations.
It will turn out that he, the truck driver, will be found partially at fault for failing to yield, as he was crossing over oncoming lanes of traffic.

Re: “Just 9 days” … between May 7 and May 15.

Note: this period covers just 5 business days! May 7th, 2016 was a Saturday with the 9th being to first business day after the accident. The Monday the week later (5 business) in the 16th of May.

Was the report on dated May 16 really Tesla’s first contact with NHTSA, or did was there a less formal contact in the 5 working days prior?

BTW: in 2015 there were ~33,800 tragic traffic fatalities in 2015, ~95 per day.
http://www.cdc.gov/nchs/fastats/injury.htm

What was the average time a written report was made to NHTSA? How many reports of traffic deaths did NHTSA receive in 2015? How many where investigated by NHTSA? How long after an accident did NHTSA open an investigation, on average?

Just asking for context … to determine how the reporting with this accident compared to a typical NHTSA modification/response.

Yawn. Tesla already disclosed the stock risk from potential product failures from multiple angles under Part II, Item 1A. “Risk Factors”:

http://ir.tesla.com/secfiling.cfm?filingID=1564590-16-18886&CIK=1318605

Tesla had to inform the purchasers of its stock in the secondary stock offering of the news of the death since it was material information.

Yikes. These Tesla comments are starting to sound like SA not IEVs.

Until the NHTSA investigates and rules that autopilot CAUSED the accident, there is no story here.

Pretty much all adaptive cruise controls on the market today cannot ‘see’ (detect) a stationary object. A ‘stationary object’ could be a rock, a crumpled paper bag, a trailer hitch, or a semi tractor/trailer. Doesn’t matter. The systems as designed today ignore stationary objects and ones moving in the opposite direction.

I’m guessing they do this to avoid false-positives and slam on the brakes in the middle of a clear road.

And calling this autopilot thing a ‘self-driving car’ is just crazy. It’s level two not level four. Tesla’s system BARELY simulates a self-driving car. It is far, far away from autonomous. Hooking adaptive cruise, lane keeping and a lane change trick together is NOT self-driving.