Tesla Motors Inc (TSLA) Created Problems With Autopilot Name

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Tesla Motors Inc (NASDAQ:TSLA)’s Autopilot driver assistance system continues to be a hot topic on Wall Street and in the automotive world as regulators investigate whether it played any role in a deadly crash that happened in May. Certainly every company wants to be first in its field with new technology, but did Autopilot bring too much too soon?

And what of the name “Autopilot”? One of Tesla’s biggest bulls thinks it may be causing drivers to expect too much of the system too soon.

Consumers not ready for Tesla’s Autopilot

Tesla CEO Elon Musk now seeks to educate drivers about Autopilot as it seems consumers just aren’t ready for it. We are now up to three accidents in which the Autopilot system was said to have been engaged when they occurred, one of which was the widely publicized fatal crash in Florida. It was probably only a matter of time before we started to hear reports of accidents as not long after Tesla pushed out the beta version of Autopilot, we began seeing YouTube clips of drivers taking risks they probably shouldn’t have been taking while using the driver assistance system.

Today Consumer Reports urged Tesla to disable some parts of Autopilot, saying that the automaker is offering too much autonomy too soon. The system is still in beta, and the publication believes that Tesla’s marketing surrounding Autopilot may be confusing consumers. The marketing message is two-pronged, according to Consumer Reports, which sums it up thus: “your vehicle can drive itself, but you may need to take over the controls at a moment’s notice.”

Tesla should disable automatic steering: Consumer Reports

The publication sees problems here because drivers may think that the system is able to do more than it can, so they might not be “engaged enough to react quickly to emergency situations.” Consumer Reports’ vice president of consumer policy and mobilization, Laura MacCleery, called for Tesla to disable automatic steering in its vehicles until it updates the Autopilot system so it can verify that the driver’s hands are actually on the steering wheel.

“In the long run, advanced active safety technologies in vehicles could make our roads safer,” she explained. “But today, we’re deeply concerned that consumers are being sold a pile of promises about unproven technology. ‘Autopilot’ can’t actually drive the car, yet it allows consumers to have their hands off the steering wheel for minutes at a time.”

She also expressed concern at the company’s offering of Autopilot in beta mode, stating, “Consumers should never be guinea pigs for vehicle safety ‘beta’ programs.” Additionally, she called Tesla out for the use of the “Autopilot” name, which she called “exaggerated,” and demanded that automakers call automated features by “descriptive” names instead.

What’s in a name? Maybe Tesla didn’t think it through…

Consumer Reports isn’t the only one raising a red flag on that “Autopilot” name. Morgan Stanley analyst Adam Jonas, who historically has been one of Tesla’s biggest bulls, said in a July 14 report that the name “could create a consumer expectation problem and a potential moral hazard.” The word evokes images and expectations pertaining to the autopilot system in an airplane, which allows commercial airline pilots to completely turn over control to the aircraft. However, Tesla’s Autopilot is a driver assistance system and even warns drivers that they are to keep their hands on the steering wheel at all times, which puts it in stark contrast to the systems used in aircraft.

Nonetheless, Jonas remains supportive of the EV manufacturer, and he notes that as more Tesla vehicles are put on the road, it’s only natural that the number of accidents and fatalities will rise. Recently the company’s Autopilot system passed the 100 million mile mark, and during that time, there has only been one known fatality. He notes that the numbers indicate a safer driving record than for the average car but adds that the numbers are still too small because only one more fatality would imply a rate far worse than that of the average car.

He also drew a comparison with the early days of airbags, which killed hundreds of people by inadvertently deploying. Most of the deaths were children sitting in the front passenger seat, but educating consumers and improving the technology provided dramatic improvements in what is now a standard safety feature. He believes regulators should consider “the ‘greater good’ of advanced automotive safety technology” and pointed out that no one called for airbags to be removed because overall, they enhance safety.

Tesla shares edged lower 0.04% to $222.44 in early afternoon trades on Thursday.

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