Making the Case for Federal Oversight

Tesla Inc. (TSLA) Engineering VP Lars Moravy appeared before the U.S. Senate Commerce Committee on Wednesday with a straightforward message: federal regulations need to catch up with autonomous vehicle technology, and they need to catch up now.

Speaking to the committee led by Sen. Ted Cruz (R-TX), Moravy laid out Tesla's vision for the future of transportation. "At Tesla, we believe autonomous vehicles are the future," he said, highlighting the potential for improved safety and accessibility. The pitch centered on a simple premise—Tesla's Robotaxis eliminate human distraction from driving, which should "dramatically cut accident rates."

But here's the problem, according to Moravy: "federal regulations" haven't kept pace with AV technology development. "We must modernize regulations that inhibit the industry's ability to innovate," he told the committee. Without a cohesive federal framework, Moravy argued, America risks losing its leadership position in automotive manufacturing. He framed the opportunity as a chance to position "NHTSA as a global gold standard for AV development."

Cybersecurity Questions Get Detailed Answers

When senators pressed Moravy on cybersecurity concerns—specifically, whether autonomous vehicles could be vulnerable to hacking—he didn't shy away from the technical details. Tesla employs "many layers of security," he explained, with the car's driving controls housed in a "core embedded central layer that cannot be accessed from outside the vehicle."

The security measures go deeper. No firmware can be added to a Tesla without two people signing off using two separate keys. And according to Moravy, no hackers have ever successfully taken control of a Tesla vehicle. Far from avoiding scrutiny, the company actively invites it. "We actively participate in hacking events, paying people to try to get into our vehicles," Moravy shared.

In a post on X following his testimony Wednesday, Moravy emphasized that there wasn't an "effort too large" for Tesla to ensure safer roads.

Waymo Incident Casts Shadow Over AV Development

The timing of Moravy's testimony is notable. Alphabet Inc. (GOOGL) (GOOG) subsidiary Waymo is currently under investigation following an incident in which one of its autonomous vehicles collided with a child in Santa Monica near a school zone. This came after another Waymo vehicle, driven by a human, crashed into several parked cars in Los Angeles.

Gary Black of Future Fund LLC suggested the investigation could create headwinds for the entire autonomous vehicle industry, including Tesla's efforts, as it might lead "regulators hit the pause button" on AV development. It's a reminder that one company's safety incident can affect regulatory momentum for everyone.

Tesla's FSD Subscription Numbers

During its Q4 earnings call, Tesla disclosed that it has approximately 1.1 million active FSD subscribers worldwide. The interesting detail: over 70% of those subscribers chose to pay the $8,000 upfront fee rather than opt for the monthly subscription model.

That payment structure might be changing soon. Elon Musk announced that Tesla would discontinue the upfront payment option for FSD after Valentine's Day this month, transitioning to a subscription-only model at $99 per month.

Corporate Structure Speculation

In tangentially related Tesla news, investor Ross Gerber of Gerber Kawasaki has predicted that the electric vehicle maker could eventually become another division of X, following the potential merger of SpaceX and xAI.

Price Action: TSLA shares jumped 0.36% to $407.45 during after-hours trading on Wednesday after dropping 3.78% to close at $406.01.