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Tesla received a cease-and-desist letter from US agency over Model 3 safety claims

Key Points
  • NHTSA sent Tesla a cease-and-desist letter over "misleading statements" about the Model 3's safety rating.
  • The U.S. agency also says it referred the matter to the FTC's Bureau of Consumer Protection.
  • Documents reveal the NHTSA also subpoenaed Tesla for information on several crashes.
  • Tesla says it based its statements on "actual test results" and NHTSA injury probability data.
Tesla Model 3
Silas Stein | picture alliance | Getty Images

The U.S. National Highway Traffic Safety Administration (NHTSA) sent Tesla a letter regarding claims the company made on the safety of its Model 3 sedan.

NHTSA Chief Counsel Jonathan Morrison sent Tesla CEO Elon Musk a cease-and-desist letter in October last year to say it had become aware of "misleading statements" made by the company about the vehicle's safety rating.

The agency's main contention was with Tesla's claim in a blog post that month that NHTSA tests showed the Model 3 has "the lowest probability of injury of all cars the safety agency has ever tested."

The NHTSA said in the letter, which was posted on the legal transparency website PlainSite, that it had also referred the matter to the Federal Trade Commission's Bureau of Consumer Protection.

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It said it was "not the first time" Tesla had disregarded NHTSA guidelines "in a manner that may lead to consumer confusion and give Tesla an unfair market advantage."

According to the documents posted on PlainSite, which were obtained through a Freedom of Information Act request, the NHTSA also issued subpoenas to Tesla ordering it to produce information on several crashes.

The NHTSA did publicly dispute Tesla's claims about car safety after the blog post in question was published. The agency at the time said that there was no "safest" ranking within its five-star ranking system for crash tests.

Tesla said in a letter in response to the agency at the time that its blog statements were based on "actual test results and NHTSA's own calculations for determining relative risk of injury and probability of injury."

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The company said that, based on that data, its long-range rear-wheel drive Model 3 "achieved a Vehicle Safety Score of 0.38 that translates to an overall probability of injury of 5.7% ... No vehicle has ever achieved an overall lower score."

The NHTSA said in an emailed statement that it was "committed to rigorous and appropriate safety oversight of the industry and encourages any potential safety issue be reported to NHTSA."

"The 5-Star Safety Ratings program was created to provide consumers with information about the crash protection and rollover safety of new vehicles."

The agency added: "NHTSA's Special Crash Investigation (SCI) program investigates over 100 crashes annually. Cases of interest represent a variety of issues and manufacturers."

The FTC were not immediately available for comment when contacted by CNBC.

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