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.

On rebuttal, plaintiff’s attorney Brett Schreiber told jurors that Tesla promoted the autopilot feature knowing it increased the likelihood of distracting drivers. Schreiber displayed a 2016 statement by Musk saying the emergency braking feature could detect anything, including an alien spaceship or a hunk of metal in the road.

“Tesla knew for years that its product was defective,” he added. “Despite that people were using autopilot irresponsibly. This was a case of systematic 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.