Auto File: Tesla’s Autopilot ‘recall’ win

Aurora Innovation

13/12/2023 16:00

Dec 13 - Joe White
Global Autos Correspondent
joe.white@thomsonreuters.com 
 
Greetings from the Motor City!  
 
We’ve had a busy day in the World of Cars – and that’s without
counting the declaration from Dubai that the end of the age of
oil and combustion vehicles is coming someday. Maybe. 
 
Usually, companies and regulators wait until the Friday before a
big holiday to get bad news out of the way. But everything’s
happening earlier this year – including a recall of more than 2
million Teslas to revise their Autopilot/Autosteer software.  
 
Is that really such bad news for Tesla? Keep reading. 
 
There’s plenty more. First, a quick note: The Auto File will be
taking a break after Friday. Starting on Jan. 2, it will appear
on Tuesdays and Fridays. If this was forwarded to you, please
feel free to subscribe. It’s free.  
 
And now, away we go! 
 
Today – 
    * Tesla’s not-so-bad Autopilot recall 
    *         Driverless delivery startups keep it simple 
    *         EV charging industry drives toward consolidation 

 
Tesla’s Autopilot recall 
U.S. auto safety regulators have pushed Tesla to recall more
than 2 million vehicles and revise software to make it harder
for drivers to keep Autopilot engaged when they are not paying
attention or are operating outside the system’s design
envelope.  
 
    Tesla did not agree with the National Highway Traffic Safety
Administration’s conclusion, after more than two years of
investigation, that any action was necessary, according to a
NHTSA document. But the company agreed to send an over the air
software fix to resolve the investigation. 
 
Tesla and NHTSA did not give details on how that software update
will change the driver experience of using Autopilot. 
 
The recall and NHTSA’s framing of its findings look like a win
for Tesla overall, Reuters colleague David Shepardson reports.  
 
Regulators did not conclude that Autopilot is fundamentally
unsafe – as lawyers for accident victims and some safety
advocates outside the agency have charged. NHTSA instead said
drivers are responsible for the operation of their Teslas when
Autopilot is engaged – the same position Tesla has taken to
defend its technology. 
 
Regulators found fault with “the prominence and scope” of
controls and warnings designed to prevent driver misuse of
Autopilot – which the agency (and Tesla) describe as a “Level 2
advanced driver assistance system. That is, a technology similar
to advanced cruise control systems offered on scores of models
from other manufacturers. 
 
    Tesla spread foam on the media runway ahead of the
announcement with a lengthy post on Elon Musk’s X.com arguing
that the company has a “moral obligation” to push forward with
automated driving technology. The tweet repeated Musk’s
assertions that Teslas operating on Autopilot are ten times
safer than the average U.S. vehicle. 
 
The regulatory investigations, Justice Department inquiries and
litigation over Autopilot are not over.  
 
But the scorecard for today looks like a win for Tesla which can
keep selling Autopilot, as well as what it calls a more advanced
“Full Self Driving” system. Revising and pushing out a software
upgrade isn’t free, but it costs far less than a mechanical
repair or disabling Autopilot altogether. Federal regulators
have now formally adopted Tesla’s view that drivers are
responsible for using Autopilot safely.  
 
Essential Reading 
    * A climate summit deal to phase out fossil fuels 

    *         Is AI a real business? - Breakingviews  
    *         New vehicle prices are coming down. Very slowly.  

 
South Korea battles Chinese iron 
    South Korea’s big battery makers, suppliers to the Detroit
Three and other legacy automakers, are under pressure to produce
lithium-iron batteries, LFP for short, that can match the
performance and low cost of LFP batteries made in China by
CATL. 
 
Automakers serving the United States need LFP batteries to
reduce costs and overcome consumer reluctance to pay premium
prices for electric vehicles. Ford and GM have both said they
would buy LFP batteries from China in the short term. 
 
But long term, U.S. automakers need LFP batteries to come from
Anywhere But China because vehicles with Chinese batteries don’t
qualify for Inflation Reduction Act EV tax credits – as Ford and
Tesla have reminded would-be buyers in recent days. 
 
South Korean battery industry sources told Reuters colleague
Heekyong Yang that while they are racing to get automotive LFP
batteries into production, it is not certain they can match the
cost benchmarks set by CATL and other Chinese rivals.  
 
Chinese producers also control key links in the LFP supply
chain.  
 
SK On, Samsung SDI and LG Energy Solution are also wary of
getting caught with excess LFP battery capacity if U.S. EV sales
continue to fall short of previous, bullish expectations.  
 
 
Charging toward a shakeout 
The fragmented EV charging industry is heading toward
consolidation as big investors, including global oil companies,
buy startups struggling to compete with Tesla’s Supercharger
network, Reuters colleagues Nick Carey and Paul Lienert
report.  
 
The shakeout in the U.S. and European EV charging sector is
getting turbocharged by intense competition for prime charging
station locations. Gas stations may be going out of style with
climate diplomats, but they are sitting on the high-traffic
corners where EV charging stations would go.   
 
A measure of just how ripe this industry is for a good shake: A
Reuters analysis finds there are 900 EV charging companies vying
for land and a now-shrinking pool of capital.  
 
    Venture capital firms have pumped nearly $12 billion into EV
charging startups – but the investment wave peaked in 2022 and
has fallen sharply this year as rising interest rates forced
recalculation of risk.  
 
The U.S. government has $7.5 billion earmarked for EV charging
infrastructure. But that money is dripping out slowly. The first
charging station funded by the Biden infrastructure bill opened
just this week.   
 
UAW revs up its organizing campaign 
United Auto Workers President Shawn Fain is revving up his
campaign to organize all non-union U.S. autoworkers, using some
of the same tactics he employed to push Detroit’s automakers to
agree to 25% wage increases. 
 
The UAW hit Honda, Hyundai and Volkswagen with unfair labor
practice charges, accusing the companies of illegal efforts to
thwart employee organizing efforts. The companies denied the
charges. But the Biden administration and federal labor
regulators are on notice that the UAW expects their support. 
 
Fain relaunched his social media video series on Monday with an
appeal to non-union auto workers that used the record pay raises
won at the Detroit Three as the main selling point. 
 
The UAW president also set a high bar for success. The UAW will
not hold organizing votes at non-union factories until 70% of
workers sign cards showing support for joining up, Fain said.
That makes sense. The UAW can ill afford another failed
organizing attempt.   
  
 
A careful road to driverless vehicle success 
Driverless vehicle startups including automated semi developer
Aurora Innovation, middle-mile delivery company Gatik and
shuttle operator May Mobility are weathering the latest storm
over AV safety by sticking to fixed routes, serving business or
government customers and staying out of the headlines, Reuters
colleague Abhirup Roy reports. 
 
The high-profile robo-taxi industry is taking a beating after a
driverless car vs. pedestrian accident involving General Motors’
Cruise operation in San Francisco. 
 
B2B operations such as Aurora, Kodiak Robotics and Gatik have
kept chugging along. Their formula: Limit operations to well
defined, well-mapped routes in states such as Texas where
regulators are friendly and anti-AV advocacy groups are not as
powerful as they are in San Francisco, Cruise’s home base. 
 
That does not mean AV truck operators have a clear path to
commercial, profitable deployment. Truckers and unions want a
ban on driverless trucks – which they see as job killers.
Investors have pulled away from AV truck company shares. Several
operators, including Alphabet’s Waymo One AV truck unit, have
shut down or suspended operations indefinitely. 
 
The coming year will be critical. Aurora and Kodiak are aiming
to launch human-free driverless operations on Southwestern U.S.
highways. 
 
Fast Laps 
GM is shaking up leadership in its vehicle development
operations following a year of struggling to launch its
next-generation electric vehicles and their “Ultium” batteries.
Retiring executive vice president of product development Doug
Parks will be replaced by two executives: One overseeing vehicle
engineering, safety and motorsports and another responsible for
“key areas critical to accelerating the company’s
electrification strategy, including battery development and
manufacturing engineering activities.” Problems with
manufacturing engineering were one factor behind the EV output
miss this year. 
 
Swedish unions will stop collecting trash from Tesla stores, the
latest escalation of the brawl between Nordic unions and their
supporters and Elon Musk over his refusal to deal with unionized
Swedish mechanics. 
 
U.S. car dealers will be prohibited from charging “junk fees”
and using bait-and-switch sales tactics under new rules approved
by the Federal Trade Commission. The U.S. auto dealer lobby has
objected and signaled it will continue to fight the rules. 
 
Renault booked a 1.5 billion euro loss on a sale of Nissan
shares connected to the restructuring (and unwinding) of the
alliance between the automakers. 
 
The auditing firm that conducted a review of human rights
compliance at Volkswagen’s factory in China’s Xinjiang province
is now distancing itself from a report that found no evidence of
human rights abuses. 
 
Indonesia is opening the door to imported electric vehicles, so
long as the company is planning investments in the country.
Indonesia has rich deposits of nickel, an EV battery mineral,
and has been courting Tesla and other EV manufacturers. 
 
GM’s fuel cell business will supply technology to Komatsu for
development of a hydrogen-fueled mining truck. GM also has a
deal to supply its fuel cell systems to heavy truck maker
Autocar. 
 
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 (Editing by Alexander Smith)