Feds ask Musk's car company how its driverless taxis will avoid causing accidents in Texas rollout

Federal safety regulators have asked Elon Musk's car company to explain how its driverless taxis will avoid causing accidents when they hit the road in Texas next month before a national “robotaxi” launch that is key to keeping Tesla's stock price aloft

NEW YORK -- Federal safety regulators have asked Elon Musk's car company to explain how its driverless taxis will avoid causing accidents when they hit the road in Texas next month before a national “robotaxi” launch that is key to keeping its stock price aloft.

Tesla has been told to provide information on how its taxis will operate safely in Austin, Texas, when there is fog, sun glare, rain and other low-visibility conditions that have been tied to accidents involving the company's driver-assistance software. Those accidents, including one that killed a pedestrian, triggered the National Highway Traffic Safety Administration to launch an investigation in October of 2.4 million of Musk's vehicles.

The billionaire reassured investors on an earnings call last month that the robotaxi service would launch in Austin as planned and would quickly lead to millions of robotaxis and other autonomous self-driving Teslas operating around the country by the end of the year.

“We expect a green light after Tesla’s response but the big focus is on more widespread launches in the U.S. after the Austin pilot kicks off," said Wedbush Securities stock analyst Dan Ives. “It's a pivotal time for Musk.”

On that same call, Musk said he was stepping back from his work as President Donald Trump’s government cost-cutting czar. Tesla’s shares have risen 45% since but they're still down about 17% year to date.

Regulators routinely request safety information from automakers and NHTSA's order itself is not alarming, though it could lead to delays of the Austin launch if Tesla's answers to the nine-page letter made public by the agency on Monday are not satisfactory. The agency gave Tesla until June 19 to provide a response.

Federal regulators have limited powers over new Tesla taxis that operate without a steering wheel or brake pedals because there are no national regulations on self-driving technology. One fall back is that the vehicles themselves still must past longstanding safety checks.

“NHTSA can force a recall, either ‘voluntarily,’ by Tesla, or by ordering a recall,” said Ann Carlson, the former acting NHTSA chief. “The agency cannot, however, require some sort of pre-approval before Tesla can launch.”

In the letter, regulators posed several questions to Tesla in addition to those about low-visibility conditions. They asked for the number and models of the taxis, when and where the taxis will be deployed in the next several months, how they will be monitored remotely by Tesla in real time, the cameras and other sensors being used to guide the vehicles, the specific measures used to judge whether they are navigating the streets in a safe way, and the names of people at Tesla making those evaluations.

In his investor conference call last month, Musk spoke of an effortless driving future coming within months.

“Can you go to sleep in our cars and wake up at your destination?" the billionaire asked, then answered, "I’m confident that will be available in many cities in the U.S. by the end of this year.”

If such a future doesn't come soon, the company could struggle to justify the stock's still-high price.

Tesla reported a 71% drop in profits in the first quarter as it faced angry protests over Musk's embrace of extreme right-wing politicians in Europe and his role in cutting government jobs that has divided the country.