New Delhi

Tesla has reached a settlement in a lawsuit stemming from a 2018 car crash that claimed the life of an Apple engineer.

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The accident occurred when the engineer's Tesla Model X, operating on Autopilot, veered off a highway near San Francisco.

The settlement was reached just before the trial was set to begin.

Walter Huang, a 38-year-old Apple engineer, lost his life in the 2018 crash and his family alleged that Tesla's Autopilot system steered the Model X into a highway barrier.

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Court documents revealed that plaintiffs' lawyers had questioned a Tesla witness about the company's awareness of drivers potentially not paying attention to the road while using Autopilot.

In defence, Tesla argued that Huang misused the system by playing a video game just moments before the accident.

The terms of the settlement remain confidential.

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This development comes at a time when Tesla's CEO, Elon Musk, is actively promoting self-driving technology as pivotal to the company's financial future.

Tesla's reputation has been at stake due to several lawsuits related to Autopilot-related accidents, which could lead to significant financial implications and reputational harm for the automaker.

Reuters cited Bryant Walker Smith, a law professor at the University of South Carolina specialising in autonomous vehicle law, who said, "It is striking to me that Tesla decided to go this far publicly and then settle... What this does do, though, is it says to other attorneys, we might settle. We might not always fight it. That is the signal."

Previously, Tesla had successfully defended itself in two California trials over Autopilot by arguing that the drivers had failed to maintain attention while using the system.

Despite Musk's promises over the years about Tesla's imminent production of an autonomous car, the company has yet to deliver on this front.

Musk recently announced plans to unveil a self-driving robotaxi on August 8, after shifting focus from an inexpensive car plan to robotaxis.

To attract more users, Tesla also revealed intentions to offer US customers a free one-month trial of its Full Self-Driving driver-assist technology.

Sam Abuelsamid, an analyst at Guidehouse Insights, noted the potential repercussions of negative publicity for Tesla, especially when the company is already struggling with declining sales and reputational damage due to controversial remarks from Musk.

"The last thing they would want right now is to have a public trial showing all of the problems with Full Self-Driving," Reuters quoted Abuelsamid as saying.

Tesla's Autopilot system, priced at $6,000, offers features like speed adjustment to surrounding traffic and lane navigation on highways.

The enhanced Autopilot adds capabilities such as automated lane changes and self-parking.

Meanwhile, the Full Self-Driving option, costing $12,000, incorporates automated features tailored for city streets, including stop-light recognition.

Tesla maintains that despite these advanced features, the car does not become fully autonomous and requires a "fully attentive driver" prepared to take control at any moment.

Musk's past statement on social media in 2022 indicated a firm stance against settling cases.

"We will never surrender/settle an unjust case against us, even if we will probably lose," he said.

(With inputs from Reuters)