Tesla & Mobileye Split Over Autopilot Safety Concerns

Shares of Tesla Motors were broadly higher during the course of Monday’s session despite four shareholders in DE have filed charges against the company’s planned acquisition of renewable energy company SolarCity.

All the lawsuits claim that Tesla board and executives violated their fiduciary duty by entering into the deal, as Mr. Musk and other executives have stakes in both the companies.

“In some cases, SolarCity and members of the SolarCity Board aided and abetted breaches of fiduciary duties and that certain individual defendants would be unjustly enriched by the proposed Merger”, it said.

If a judge grants any of the plaintiffs an injunction, the deal could miss its target to close by the end of this year, Tesla said.

Tesla said in the filing that the actions are without merit and the shareholders were unlikely to prevail in delaying the transaction.

Luxury electric vehicle maker Tesla reported Monday that four lawsuits have been lodged seeking to block its merger with troubled solar panel installer Solar City.

A hearing is scheduled for 18 October.

“It has always been Mobileye’s position that Tesla’s Autopilot should not be allowed to operate hands-free without proper and substantial technological restrictions and limitations”, said the company’s most recent statement, adding: “In communications dating back to May 2015 between Mobileye Chairman and Tesla’s CEO, Mobileye expressed safety concerns regarding the use of Autopilot hands-free”.

According to the complaint, before the announcement of this deal, SolarCity was on the verge of collapse. Tesla’s China-based sales staff was told to make the system’s limitations clear.

Tesla said in a statement that the auto was too damaged in the wreck to transmit data to company servers and that Gao’s family had not cooperated with the company’s investigation. These conflicts of interest have prompted concerns about the true motivation for the deal, particularly as both companies continue to report quarterly losses. “The most significant upgrade will be the use of more advanced signal processing to create a picture of the world using the onboard radar”, said the automaker on its website.

Tesla shares were up 1.6 percent at $208.76 in early trading on Monday on the Nasdaq.

Tesla uses the term “beta test” for drivers now deploying the latest version of the Autopilot system, which was introduced in October 2015.

Regulatory filings have shown that Tesla spent $600 million in cash during the first six months of 2016, while SolarCity spent $1.3 billion in cash.

Tesla says the new system will rely primarily on radar, a change from when radar was added a few years ago as a way to improve Autopilot.