Safety regulators in the U.S. sent a letter to Tesla (NASDAQ: TSLA) asking why the car company hadn't filed the "required" recall notice regarding its recent over-the-internet update on its Autopilot systems. The recent update addressed an issue with the Autopilot system that reportedly led to nearly a dozen collisions with emergency vehicles.
According to the National Highway Traffic Safety Administration (NHTSA), Tesla must recall vehicles using the Autopilot system if an over-the-internet update was made to address safety defects.
"Any manufacturer issuing an over-the-air update that mitigates a defect that poses an unreasonable risk to motor vehicle safety is required to timely file an accompanying recall notice to NHTSA," the NHTSA wrote in a letter to Tesla's director of field quality, Eddie Gates. "Tesla's failure to respond promptly and fully to this letter could subject Tesla to civil penalties... [and] Other remedies and sanctions are available as well."
Civil penalties against the company could top $114 million, according to the NHTSA. For reference, Tesla made a net income of $1.14 billion, ten times the potential penalty, in the second quarter of 2021, alone.
According to the NHTSA, manufacturers must alert the agency to any defects within five days of when those defects were found. The NHTSA uses this information to ensure that recalls cover all affected vehicles. Tesla issued its safety update in September.
The NHTSA began an investigation into the Tesla collisions with emergency vehicles in August after it had received reports of 11 such accidents that had led to at least one death. It's believed that the accidents occurred because the Autopilot systems failed to detect emergency-vehicle lights in low-light conditions. The September "Emergency Light Detection Update" was meant to improve system response to emergency vehicle detection in low-light.
The NHTSA is asking Tesla to send documentation showing when the company learned about the safety issue, any internal investigations that were carried out, any agreements made with customers regarding repairs, and other information regarding how the relevant accidents would have differed had the safety fault not been present.
The NHTSA also wants to know about Tesla's Full-Self-Driving (FSD) systems and how the company decides who is allowed to do beta testing. The NHTSA has separately alleged that Tesla is hiding safety information about its FSD system by requiring beta-test drivers to sign non-disclosure agreements.
According to the letter, Tesla is required to tell the NHTSA whether or not it intends to issue a recall on vehicles equipped with Autopilot. If Tesla declines to do so, the company must defend its decision. The stated deadline for Tesla's response or extension request is November 1.
This is the first time that the NHTSA has signaled how it will treat vehicle safety updates sent over the internet. Tesla is far from the only car manufacturer working on software via the internet.
"Now every company has exposure every time they do an over-the-air update because NHTSA may come back weeks later and say 'wait a minute, that was a stealth recall,'" Philip Koopman, a professor at Carnegie Mellon University who studies automated vehicle safety, told reporters.
Tesla has fought back against the NHTSA's requests for recalls in the past. In January, Tesla refused to issue a recall regarding a defect that resulted in vehicles' touch screens going dark. The defect could result in the failure of backup cameras and defrosters. Tesla argued that the fault did not constitute a safety defect and thus didn't require a recall. However, after the NHTSA began court proceedings against the automaker, the company agreed to issue the requested recall of 135,000 vehicles.