Federal regulators have started a new investigation into Tesla’s Full Self-Driving (FSD) feature after multiple incidents in which the cars reportedly violated traffic laws. According to the National Highway Traffic Safety Administration (NHTSA), 58 cases are under review where Teslas using FSD ran red lights, drove on the wrong side of the road, or were involved in crashes that resulted in injuries and fires.
This probe adds to several ongoing investigations into Tesla’s driver-assistance technologies. The company has been promoting its plan to update millions of existing vehicles with software enabling full self-driving capability. Elon Musk, CEO of Tesla, has stated his intention to launch hundreds of thousands of driverless taxis across U.S. cities by next year.
Seth Goldstein, a Morningstar analyst, questioned the reliability of the technology: “The ultimate question is, ‘Does the software work?’” Ross Gerber, a money manager and long-time Tesla investor, added: “The world has become a giant testing ground for Elon’s concept of full self-driving, and it’s not working.”
The current investigation covers 2.9 million Teslas equipped with FSD. Critics have said that calling it “full self-driving” may mislead drivers into thinking their vehicles can operate without oversight. Tesla maintains that drivers are repeatedly warned they must remain attentive and ready to take control at all times.
Regulators noted that many drivers involved in recent accidents reported receiving no warning from their cars before unexpected behavior occurred.
Tesla shares dropped nearly 3% on Thursday before closing down 0.7%.
Previously, NHTSA began an inquiry last year into 2.4 million Teslas following crashes during low-visibility conditions, including one fatality involving a pedestrian. Another investigation this year focused on Tesla’s “summon” feature after minor collisions were reported in parking lots. In August, NHTSA launched another probe concerning delayed crash reporting by Tesla.
In August as well, a Miami jury held Tesla partly liable for a deadly 2019 Florida crash involving its Autopilot system—distinct from FSD—and awarded over $240 million in damages to victims’ families. Tesla plans to appeal.
Gerber suggested that Tesla should reconsider its approach: “They have to take responsibility for the fact that the software doesn’t work right and either adjust the hardware accordingly — and Elon can just deal with his ego issues — or somebody is gonna have to come in and say, ‘Hey, you keep causing accidents with this stuff and maybe you should just put it on test tracks until it works.’”
The FSD feature under scrutiny is classified as Level 2 driver-assistance technology requiring constant driver attention. Earlier this week, Tesla released an updated version of FSD and is also testing an advanced model intended not to need human intervention—a development Musk has promoted for years.
Tesla faces increased pressure regarding FSD as its core business faces challenges. The company has experienced declining sales amid customer boycotts related to Musk’s political endorsements and competition from other electric vehicle manufacturers offering lower-priced models.
In response to these market pressures, Musk announced new budget versions of existing models such as the Model Y earlier this week. However, investors reacted negatively due to expectations for deeper price cuts or entirely new products; shares fell by 4.5%.
