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The Street
The Street
Business
Luc Olinga

Tesla's Elon Musk Challenges Regulators Again

It's called pouring gasoline on the fire -- even when we're talking electric vehicles. 

Elon Musk does not like the pressure that Tesla's (TSLA) received from regulators in recent months, and he makes that known, even if it means making a tough situation worse.

The CEO of the high-end electric-vehicle manufacturer takes particular umbrage at the National Highway Traffic Safety Administration, which has carried out yet another car recall in a bit more than three months.

To a Twitter user, who asks Musk why Tesla is recalling the Boombox feature, which enables Tesla car owners to play music through a speaker located outside their cars, Musk did not hesitate to swing against the federal agency, which he calls the "Fun Police."

"What was the rationale behind the BoomBox recall?" the user asked.

"The fun police made us do it (sigh)", responded the billionaire.

Fart Sound

Tesla's Boombox enables users to transmit sound outside the car through built-in external speakers. The speaker was a safety measure when NHTSA required electric cars to produce sound to alert pedestrians.

Tesla updated new sounds, such as goat, chic, clap, fart and some others that can be used as a horn. Tesla already had a fart-sound feature; however, users can use it through internal speakers.

The automaker on Feb. 4 decided to recall just over 578,000 cars to "disable Boombox functionality in Drive, Neutral and Reverse modes with an OTA firmware update," according to a notice from NHTSA.

"While Boombox can enhance the conspicuity of the vehicle to pedestrians, a vehicle that uses Boombox when in motion may cause the [pedestrian warning system] to be noncompliant with Federal Motor Vehicle Safety Standard 141, which could increase the risk of a collision," the federal agency said.

Adding: "Tesla is not aware of any crashes, injuries or fatalities related to this."

FMVSS 141 is a norm, says NHTSA, that establishes performance requirements for pedestrian alert sounds for electric and hybrid vehicles.

NHTSA had opened the investigation into the Boombox feature in January 2021. After discussions with Tesla, the manufacturer chose to recall 2020-2022 Model S, Model X, and Model Y vehicles and certain Model Year 2017-2022 Model 3 vehicles built or retrofitted with pedestrian warning system.

Tensions between Tesla and NHTSA are at their highest right now. The federal agency has opened different investigations into Tesla, one into its Autopilot driver assistance system and another into its Full-Self-Driving feature. 

NHTSA considers in particular that the name Full Self-Driving is misleading and has made this known to Tesla. Tesla has also made two recalls in less than five months related to this feature.

The Austin company recalled nearly 54,000 cars -- all models combined, S, X, Y, 3 -- in early February to disable a Full-Self-Driving feature, which enables sits cars to pass through intersections without having to come to a complete stop if no other car is engaged or if no pedestrians are around. 

"It’s clear that if you’re marketing something as full-self-driving and it is not full self-driving, and people are misusing the vehicles and the technology, but you have a design flaw and you have to prevent that misuse,” Jennifer Homendy, the head of the U.S. National Transportation Safety Board, told CNBC last October.

Short-Seller Enrichment Commission

Besides NHTSA, Musk also has a rocky relationship with the Securities and Exchange Commission, which he has renamed the Shortseller Enrichment Commission.

"Just want to that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point," he tweeted in October 2018.

A few weeks before this tweet, the SEC said that it had reached an agreement with Tesla and Musk on what became Tweetgate.

The Tweetgate affair started on Aug. 7, 2018, with this post by Musk on his Twitter account: " Am considering taking Tesla private at $420. Funding secured."

The tweet shook Tesla stock. The SEC filed a complaint against Musk.

A settlement was announced on Sept. 29, 2018. It required Musk to step down as Tesla’s chairman. Tesla and Musk agreed to pay $40 million in penalties. Tesla also agreed to have the company's lawyers preapprove tweets with material information about the company. And two new independent directors were appointed.

But it's not over since Tesla recently said it had received a subpoena from the SEC in November, requesting information related to the settlement, which mandated that the company vet Musk's tweets about information that could weigh on the stock.

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