When using the option "--graphicx-option=auto", a spurious "'))" is included in the tex output and prevent the proper compilation. This is due to a typo in writers/latex2e/__init__.py:
PreambleCmds.graphicx_auto = r"""% Check output format
\ifx\pdftexversion\undefined
\usepackage{graphicx}
\else
\usepackage[pdftex]{graphicx}
\fi'))"""
Attached patch correct the typo.
Patch to apply to docutils/writers/latex2e/init.py
Thanks for the bug report and patch. It's applied.
BTW: with an up-to-date TeX installation the recommended value is the default: no option.
The relevant code for auto detection of the converter is now included in graphicx.sty.