Court ruling: Tesla loses autopilot case

Tesla suffered a major defeat in a legal battle over its Autopilot driver assistance system. A jury in a Florida court ruled that the automaker bears partial responsibility for a 2019 accident in which a woman died and her boyfriend was seriously injured. The family of the woman, Naibel Benavides, was awarded $59 million in damages, and the man, Dillon Angulo, $70 million. In addition, $200 million in punitive damages was imposed, an additional penalty unique to the American legal system.

This is the first time that juries have awarded damages against Tesla in a lawsuit involving its Autopilot system. In two other California lawsuits, courts ruled in 2023 that Tesla was not liable. Tesla has settled a number of other Autopilot lawsuits before going to trial.

The jury in Florida has now found that Tesla is one-third responsible for the accident, and the Tesla driver involved in the collision is two-thirds responsible. Tesla will now pay one-third of the damages but will cover the entire penalty. The total amount for the company is $243 million. Tesla immediately announced that it would appeal. The Tesla driver had already reached an out-of-court settlement with the family of the woman who died in the accident, separate from these proceedings.

The accident occurred when the driver of a Tesla Model S crossed an intersection and collided with the car driven by Benavides and Angulo, which was parked on the other side. Benavides and Angulo were standing next to the car and were struck. According to the lawsuit, the driver, George Brian McGee, had activated the Autopilot system. Before reaching the intersection, the cell phone he was using fell from his hand, and he bent down to pick it up. He then collided with the parked car at a speed of more than 80 kilometers per hour, and that vehicle struck Benavides and Angulo.

Autopilot is a driver assistance system, but contrary to what its name suggests, it does not allow fully autonomous driving. Tesla itself reminds its customers that they must always pay attention to what's happening on the road and keep their hands on the steering wheel, even when Autopilot is engaged. Nevertheless, critics have often accused Tesla of using the technology, simply because of its name, to encourage drivers to become careless and not pay attention to the road. In recent years, the Autopilot system has been linked to hundreds of accidents, some of them fatal. It is the subject of investigations by the National Highway Traffic Safety Administration (NHTSA).

The lawsuit against Tesla alleged that the Autopilot system had "design defects" and that the company had advertised it in a way that "exaggerated" its capabilities. Tesla and its CEO, Elon Musk, had encouraged drivers to overrely on the technology. Tesla's lawyers, however, argued in court that the driver was solely to blame for the accident. The driver also testified during the three-week trial. He said he thought the Autopilot system would come to his aid if he made a mistake.

Tesla said Friday after the jury's decision: "Today's verdict is wrong and will only serve to set back automotive safety and jeopardize the efforts of Tesla and the entire industry to develop and deploy life-saving technology."

Observers believe the ruling could have a signaling effect. Tesla is still in the midst of several other legal disputes surrounding the Autopilot system. Analyst Gene Munster of the investment firm Deepwater Asset Management wrote on the platform X that the decision could set a "precedent." However, with reference to the appeals process, he added that he doubted Tesla would ultimately pay the amount now stipulated.

The defeat comes at a time when the automaker is trying to rapidly advance its autonomous driving activities. In June, it launched a robotaxis test in Austin, Texas. However, unlike some other robotaxis ride-hailing services like Waymo, the test still includes a safety driver in the vehicle.

A few days ago, Tesla CEO Musk promised a rapid expansion of the robotaxi service into other US states, such as California, Nevada, and Florida. He said that if regulators cooperate, Tesla could cover an area encompassing half the American population with its robotaxis by the end of this year. Musk has often said that he no longer sees Tesla's future potential primarily in conventional electric cars, the business that has previously accounted for the majority of its revenue. Instead, he describes Tesla's activities in autonomous driving and humanoid robots as key future pillars.