In a significant development, Tesla has reached a settlement in a high-profile wrongful death case that was set to put the electric car company and its controversial automated driving system on trial. The terms of the settlement were not disclosed to the public.

The case revolved around the tragic death of Walter Huang, a former Apple engineer, who died in a crash while his Tesla Model X was operating on Autopilot mode. The incident occurred on March 23, 2018, when Huang's vehicle struck a concrete median in Silicon Valley.

The National Transportation Safety Board, in its investigation, revealed that Autopilot was engaged for nearly 19 minutes before the fatal crash occurred, with the car traveling at a speed of 71 mph. The investigation concluded that the vehicle veered off the highway, leading to the tragic accident.

The settlement brings an end to what could have been a lengthy trial, with jury selection scheduled to begin on Monday. The trial had the potential to last several weeks, but the parties involved opted to reach a resolution on Monday. The exact reasons behind the settlement remain undisclosed.

This settlement holds significance for Tesla as the company has been facing a challenging year, marked by a loss of popularity and a decline in its market value. Despite this, Tesla's CEO, Elon Musk, and the company maintain that their Autopilot and Full Self-Driving technologies are superior to competitors, contributing to Tesla's status as the world's leading electric vehicle maker.

However, Huang's family argued that Tesla had oversold the capabilities of its Autopilot technology and claimed that it was not as safe as advertised. The family alleged that the company knew about the flaws and risks associated with the system, accusing Tesla of falsely marketing it as self-driving software.

Representatives for Huang's family and Tesla have not provided immediate comments on the settlement. The case drew attention to Tesla's Autopilot technology, which has long been under scrutiny. Following a two-year investigation analyzing 1,000 Tesla accidents involving Autopilot, the National Highway Traffic Safety Administration found that the system could give drivers a false sense of security.

The NHTSA concluded in December 2023 that Autopilot could be easily misused in certain dangerous situations, where it may be unable to navigate the road safely. Both the NHTSA and the National Transportation Safety Board had been investigating other crashes involving Tesla vehicles using driver-assist features, including incidents where vehicles collided with emergency vehicles at accident scenes.

As a result of the NHTSA findings, Tesla initiated a recall of all 2 million of its cars in the United States. The recall aimed to provide drivers with more warnings when Autopilot is engaged, prompting them to pay attention to the road and maintain their hands on the wheel.

Despite these controversies, Tesla reaffirms that when used correctly, Autopilot is a safe technology that can help reduce fatalities. The company stresses the importance of drivers keeping their hands on the wheel and their focus on the road. Tesla contends that Huang's accident occurred because he failed to comply with these safety instructions, as evidenced by his distracting use of a video game on his phone during Autopilot engagement.

With the settlement, Tesla avoids the possibility of being ordered to pay damages to Huang's family. Wrongful death suits involving major corporations have historically resulted in large awards, potentially reaching billions of dollars.

The outcome of this case underscores the challenges faced by Tesla in the aftermath of the settlement as it seeks to address concerns and restore faith in its Autopilot technology, which had been a driving force behind the company's market success. Following news of the settlement, Tesla's stock (TSLA) rose by 5% on Monday, reflecting investor optimism regarding the resolution of the case.