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Tesla (TSLA) Stock Gains While Self-Driving Tech On Trial

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A potentially seminal moment for the future of Tesla (TSLA - Free Report) , and other companies that have invested heavily in self-driving car technology, occurred Tuesday morning when the National Transportation Safety Board met to determine the cause of a fatal crash involving a Tesla vehicle.

The NTSB announced today that “operational limitations” in Tesla's Autopilot technology played a major role in a May 2016 crash that left the driver, Joshua Brown, dead. The committee determined that the Tesla Autopilot system “functioned as designed, but was not meant to be used on the road type the crash occurred on.”

Brown became the first person to officially die in a self-driving car accident when his Tesla Model S electric sedan ran into a semi-trailer truck in Florida. His vehicle was set on cruise control at 74 mph—above the 65 mph speed limit—just before the deadly crash.

Autopilot had been engaged for 37 of the 41 total minutes of the trip—before the system and Brown failed to detect a semi truck crossing in front of the car and collided with the truck's trailer.

Tesla’s Autopilot uses sensors on the steering wheel that detect whether the driver is gripping the wheel. If it is determined that the driver is not in control of the Tesla vehicle, it will issue warnings that are designed to disengage Autopilot.

According to a CNBC report, data retrieved from the car showed that Brown had his hands on the steering wheel seven times while autopilot was engaged—for a total of just 25 seconds.

The NTSB stated that collision avoidance systems can assist drivers in accident prevention, but they do not remove the need for the driver. The committee noted that consumers must understand just how nascent the technology is and how detrimental complacency behind the wheel can be.

In a series of tweets, the NTSB summarized some its findings about the need for people to be fully engaged while driving.

“Driving is a visual task and steering wheel torque monitoring is not [an] effective method of ensuring driver engagement,” NTSB tweeted. “Decades of research, especially in aviation, show humans are very poor at monitoring automated systems.”

Nevertheless, the committee’s finding did not spell awful news for Tesla—or the long-term future of self-driving vehicles. And Brown’s family announced that they don’t blame Tesla for the fatal crash.

“There was a small window of time when neither Joshua nor the Tesla features noticed the truck making the left-hand turn in front of the car. People die every day in car accidents. Change always comes with risks, and zero tolerance for deaths would totally stop innovation and improvements," the family said in a statement yesterday.

NTSB’s forward-looking sentiment proved to be similar, and the report notes that vehicle-to-vehicle technology will help curb crashes in the future. NTSB also said that tech-filled connected vehicles will increase overall road safety, but it won’t become most effective until all vehicles on the road are equipped with the technology.

For now, it seems that the safety board is leaning on the side of human accountability and knowledge of where the technology is today. NTSB will likely make further recommendations.

This is not to say that Tesla will be absolved completely of any wrongdoing. But the committee seems to have a positive long-term view of self-driving car technology, much like Elon Musk himself.

Bottom Line

Autopilot accidents aren’t likely to stop anytime soon, and it won’t be easy when a crash proves fatal. But the Brown's show of support for Tesla’s futuristic technological vision, on top of NTSB’s long-term view, could help the company’s public perception.

Shares of Tesla gained over 0.70% on Tuesday morning, and investors seem to be relieved that the NTSB did not hand down a massive rebuke of Tesla and the future of self-driving vehicles.

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