Tesla Rejected $60m Settlement Before $242m Autopilot Trial
Tesla rejected a US$60m settlement offer just months before a Florida jury ordered the company to pay US$242.5m over a fatal 2019 Autopilot crash, according to new legal filings.
The EV manufacturer, which is headed up by Elon Musk, had 30 days to accept the settlement proposal made in May but failed to respond within the timeframe, effectively rejecting the offer by default.
Court documents requesting Tesla cover legal fees for the plaintiffs revealed the settlement opportunity, which would have cost the company roughly a quarter of the eventual jury award.
The details of the case
The case centred on a 2019 incident, in which a man named George McGee was driving a Tesla Model S with Autopilot engaged when he allegedly leaned forward to retrieve something from his footwell.
With his attention diverted, the vehicle failed to detect a parked Chevrolet Tahoe at an intersection and did not brake or steer to avoid collision.
The Tesla struck Naibel Benavides Leon and her partner Dillon Angulo, who were standing beside the parked car.
Leon was killed in the crash while Angulo sustained severe injuries.
The jury’s verdict
Earlier this month, a federal jury in Miami found Tesla partially liable for the fatal crash despite the driver's admitted fault.
The jury assigned two-thirds of the blame to McGee and attributed one-third to Tesla, determining the Autopilot system contained defects that contributed to the tragedy.
Since the incident, Tesla has always maintained that it was not responsible for the driver’s inattentiveness that caused the crash.
As such, the company plans to appeal the decision “given the substantial errors of law and irregularities at trial”.
While technology in autonomous vehicles (AVs) has changed in the past six years, some industry insiders believe that this case bodes badly for driverless cars, as well as the implicit code of ethics surrounding them.
Colin Barnden, Principal Analyst at Semicast Research, expressed that, should Tesla successfully appeal the verdict, the whole AV sector will find itself in murky moral waters.
"The fantasy that automated longitudinal and lateral vehicle control equates to 'self-driving' is shattered; that the driver alone bears culpability for activating such software and the OEM is blameless," he said.
"The responsibility genie is now well and truly out the bottle."
The regulatory implications
The verdict arrives as Tesla seeks regulatory approval to expand its robotaxi services across multiple US states, with applications pending in California, Nevada, Arizona and Florida.
CEO Elon Musk has set an ambitious target of making fully self-driving robotaxis available to half the US population by year-end, a timeline that legal experts are now questioning.
"The timing for Tesla in light of the FSD rollouts and robotaxis is awful," says Aaron Davis, Co-Managing Partner at law firm Davis Goldman.
"Now there's essentially an opinion that some aspect of Tesla's business is not safe and maybe the safety that the company advertises isn't what it's cracked up to be."
The impact on Tesla and the market
This is not the first time that plaintiffs have taken Tesla to court over its Autopilot technology, though previously the company has either won those cases or has reached out-of-court settlements.
This makes this verdict particularly significant, especially because several similar cases are currently pending.
"From an image standpoint, it's a black eye," says Gene Munster, Managing Partner at Deepwater Asset Management, a Tesla investor.
Much of Tesla's lofty market valuation depends on Musk's investments in robotics and AI technologies, making autonomous vehicle success imperative as demand for traditional EVs has cooled globally.
The expansion of driverless vehicles represents crucial ground Tesla has lost to competitors in recent years, with the company launching only a limited robotaxi trial in Austin, Texas using supervised Model Y crossovers.
"As the AI expert on this case, I am glad to see this outcome," says Missy Cummings, Professor of Robotics & AI at George Mason University.
"My heart goes out to Naibel Benavides's family – no amount of money can ever bring her back but they can be assured their legal fight will save other lives."
