Tesla Slapped with Record $329M Penalty for Fatal Autopilot Failure; Self-Driving Credibility in Freefall

TradingKey - A Miami jury has ruled that Tesla (TSLA) is partially liable for a fatal accident that occurred in Key Largo, Florida, in 2019, ordering the company to pay $329 million in damages.

The accident took place in 2019 when driver George McGee, operating a Tesla vehicle with the Enhanced Autopilot system engaged, temporarily diverted his attention from the road to his phone. He stated that the vehicle failed to provide adequate warning of an impending road end, ultimately colliding with a young couple standing outside the roadway. This tragedy resulted in the death of 22-year-old Naibel Benavides Leon, while her boyfriend, Dillon Angulo, sustained severe injuries.

The jury mandated that Tesla pay $329 million in damages, which includes $129 million in compensatory damages and $200 million in punitive damages.

Plaintiff's attorney Brett Schreiber noted that Tesla deliberately created a marketing environment that could distract drivers while promoting its Autopilot feature. He specifically referenced a 2016 statement by Elon Musk, in which Musk claimed Tesla's emergency braking system "can detect anything, including alien spaceships or a large piece of metal on the road." Schreiber emphasized, "Tesla has known about defects in its products for years but still allowed consumers to use Autopilot irresponsibly; this is a classic case of systemic failure."

This verdict is undoubtedly a significant blow to Musk, who has bet the company's future on full self-driving technology.

As of the time of reporting, Tesla's stock price declined 2.22% intraday, with a year-to-date decline of 25%, making it the worst-performing among major tech giants.