Tesla settles with Apple engineer's family who said Autopilot caused fatal Bay Area crash

Tesla has settled a high-profile case that was set to put the electric car company and its controversial automated-driving system on trial starting Monday.

Terms of the settlement were not disclosed. Jury selection was set to begin Monday in a wrongful death suit filed by the family of a former Apple engineer who died after his Tesla Model X crashed while the Autopilot feature was engaged. The trial could have lasted several weeks, but the parties settled Monday.

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Walter Huang was killed when his Tesla struck a concrete highway median in Silicon Valley on March 23, 2018. The National Transportation Safety Board, in its investigation, found that Autopilot was engaged for nearly 19 minutes before the fatal crash, when the car, traveling at 71 mph, veered off the highway.

The settlement marks another crucial moment for an embattled company that has lost popularity and a third of its market value this year. CEO Elon Musk and the company say that its Autopilot and Full Self-Driving technologies are ahead of the competition and a big reason why Tesla has become the world's largest electric vehicle maker - just ahead of Chinese rival BYD. But Huang's family said Tesla oversold its Autopilot technology's capabilities, and that it is not as safe to use as advertised.

Representatives for Huang's family and Tesla did not immediately respond to requests for comment.

Tesla has come under intense scrutiny for its Autopilot technology over the six years since Huang's fatal crash. After a two-year investigation that analyzed 1,000 Tesla crashes while vehicles had Autopilot engaged, the National Highway Traffic Safety Administration said the Autopilot system can give drivers a false sense of security. It can be easily misused in certain dangerous situations when Autopilot may be unable to safely navigate the road, NHTSA found in December 2023.

NHTSA and the National Transportation Safety Board have also been investigating crashes involving Tesla vehicles using the various driver assist features, including a series of crashes into emergency vehicles on the scene of other accidents.

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Immediately following the December NHTSA report, Tesla recalled all 2 million of its cars in the United States, giving drivers more warnings when Autopilot is engaged and they are not paying attention to the road or placing their hands on the wheel.

Yet the company maintains that the technology is safe to use when used correctly and reduces fatalities. Autopilot requires drivers to keep their hands on the wheel and Tesla says people who use the automated-driving technology should keep their eyes on the road.

That didn't happen in the case of Huang's crash, Tesla has said. In a March 30, 2018, blog post, Tesla said Huang's hands were not detected on his car's steering wheel for six seconds prior to the crash. The company said it believes Huang was responsible for the crash because investigators found he was playing a video game on his phone while Autopilot was engaged. Huang did not brake or attempt to steer his car away from the concrete barrier before it crashed.

Although Huang's family acknowledges he was distracted while the car was driving, they argued Tesla is at fault because it falsely marketed Autopilot as self-driving software. They alleged Tesla knew that Autopilot was not ready for prime time and had flaws that could make its use unsafe.

Tesla did not respond to a request for comment on the allegations.

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"Mrs. Huang lost her husband, and two children lost their father because Tesla is beta testing its Autopilot software on live drivers," said B. Mark Fong, the lawyer who brought the suit filed in California state court in a May 2019 complaint.

If a jury had found in favor of Huang's family, Tesla could have been forced to pay damages, and they could have added up quickly. Wrongful death suits involving big companies have at times resulted in awards north of $1 billion.

Autopilot's promise has also helped to boost Tesla's stock in recent years to make it the most valuable automaker in the world - even as its stock is among the worst-performers in 2024. Musk in October 2023 on a call with analysts said autonomous driving "has the potential to make Tesla the most valuable company in the world by far."

Tesla's stock (TSLA) rose 5% Monday.

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