US Court: "Tesla Knew of Autonomous Driving Defects" Stock Slips

Tesla Faces Trillion-Won Compensation Crisis

A U.S. court has made a preliminary ruling suggesting that electric vehicle maker Tesla appeared to have been aware of defects in its Autopilot driver-assistance system in a wrongful death lawsuit related to a fatal accident.

According to Bloomberg and other sources on the 22nd (local time), Palm Beach County Circuit Court Judge Reid Scott in Florida allowed the family of a traffic accident victim who filed a lawsuit against Tesla to seek punitive damages on the 17th.

The court found that the plaintiff, the family of Tesla vehicle owner Steven Banner, presented sufficient evidence of Tesla's illegal acts and gross negligence, and ruled that if a jury later concludes Tesla's negligence caused the accident, punitive damages could be ordered.

Under Florida law, punitive damages can be claimed if intentional wrongdoing or gross negligence is confirmed, and the compensation amount could reach billions of dollars (trillions of Korean won).

Court: "Strikingly similar to past accidents... It is reasonable to conclude they were aware of the problem"

[Image source=AP Yonhap News]

This lawsuit was filed by the family of Steven Banner, who died when his Tesla Model 3, driving with Autopilot engaged north of Miami in 2019, collided under the trailer of a large truck, holding Tesla responsible for the accident.

Judge Scott compared this accident to a previous 2016 Autopilot crash, noting it was "chillingly similar." The 2016 fatal accident also involved the Autopilot system failing to detect a crossing truck, causing the vehicle to crash under the trailer.

Judge Scott ruled, "It is reasonable to conclude that Tesla's CEO and engineers were seriously aware of the Autopilot's failure to detect traffic."

He also pointed to Tesla's 2016 video advertising Autopilot by showing the vehicle driving without driver intervention, stating, "This video contains aspirations for autonomous driving and shows no indication that this technology does not currently exist in the market."

Furthermore, Judge Scott found evidence that Tesla employed a "marketing strategy portraying the product (Autopilot) as autonomous driving," and that CEO Elon Musk's public statements about the technology significantly influenced belief in the product's capabilities.

Tesla previously won a trial related to Autopilot late last month

Earlier, Tesla won its first wrongful death civil lawsuit related to Autopilot held in California late last month. At that trial, a 12-member jury found no manufacturing defects in the Tesla vehicle and ruled Tesla was not liable for the accident. That lawsuit was filed by victims of a 2019 accident involving a Tesla Model 3, seeking $400 million (approximately 541.2 billion KRW) in damages from Tesla.

However, the Florida trial has put Tesla back in a difficult position. If Tesla loses, it could influence similar lawsuits going forward. The schedule for the jury verdict has not yet been set. Meanwhile, concerns among Tesla investors grew, and Tesla's stock closed at $234.21 on the New York Stock Exchange, down 2.90% from the previous day.