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Tesla Motors Inc. (TSLA) Over-the-air Updates Changing

Tesla Model 3 (TSLA)

Tesla Motors Inc ’s Autopilot system was the subject of a federal government investigation that began after a Model s driver died in an accident. The NHTSA launched its investigation following the incident in June, and on Thursday, it closed the investigation, saying it won’t issue any recall.

Over-the-air updates could change the nature of recall

Had the firm updated its software earlier, neither the accident would have taken place, nor the investigation. In this case, Tesla’s Autopilot failed to distinguish between a white truck the and bright sky, and didn’t apply the brakes.

NHTSA, which closed the investigations, hinted that in some cases, if the firm is able to make cars safer with over-the-air updates, it will change the nature of recalls, says a report from Business Insider.

When asked if NHTSA is considering changing the recall structure as over-the-air updates become more common, spokesperson Bryan Thomas replied, “Sure I think that’s something we will take a look at in the future.”

Tesla software was not defective

Before clearing Tesla Motors Inc of any wrongdoing, NHTSA made note of two things. First, when the Level 2 self-driving system was applied, it was supposed to be the driver’s responsibility to monitor the system and intervene, which the victim should have done but didn’t, despite having ample time for it.

Second, it was known that Autopilot was unable to detect traffic crossing in front of the vehicle, so it wasn’t the software’s defect/fault if it didn’t automatically apply the brake.

Tesla did issue a software update in September 2016, claiming it to be capable of preventing this type of accident, but it shouldn’t be seen as a remedy, warned Thomas. Presumably, Autopilot would apply the brakes before the vehicle hits an obstacle if faced with a similar situation today, but that would be a result of the software update made after the accident. Hence, it was not defective.

Tesla Motors Inc (TSLA) Model S Firey Crash

Tesla investigation – what it means?

One take-away from the Tesla investigation is – if automakers can dispatch over the air software updates they will avoid costly recalls, notes Business Insider. The Tesla Motors Inc update addressed some of its concerns about Autopilot in its report, acknowledged NHTSA. This, however, is not possible for most traditional automakers to do as their vehicles are incapable of receiving updates wirelessly.

In the future, if the NHTSA determines that issuing a software update could reduce the time required for a traditional recall, then it might change the way it handles defects, said Thomas. “These are questions the agency will have to deal with in the future, but we would very much like to move quickly toward that future,” Thomas said.

However, this does not free the automakers (at least for now) from the fear of a recall that might be forced to do so in case a defect is found even if it could be fixed with a simple over-the-air update.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.