Tesla faces U.S. probe over FSD crashes ahead of its no-steering, no-pedal model

U.S. auto safety regulator National Highway Traffic Safety Administration (NHTSA) has escalated its investigation into Tesla’s driver-assistance system after a series of crashes in low-visibility conditions, in a move that could lead to enforcement action and a potential recall affecting millions of vehicles.

In a memo dated March 18, the agency said it is analysing nine crashes in which Tesla vehicles, operating with the company’s self-driving software, failed to adequately alert drivers to take control. The incidents occurred in conditions such as fog, glare and airborne dust, where the system’s cameras were unable to clearly identify road hazards.

The probe, originally opened in 2024, has now been upgraded to an “engineering analysis," a more serious phase that typically precedes decisions on recalls or other regulatory action. The investigation could cover as many as 3.2 million Tesla vehicles in the U.S.

Delayed warnings and visibility limitations

According to the NHTSA, a key concern is the system’s delayed or insufficient driver alerts in situations where visibility is compromised. Because Tesla relies solely on cameras, unlike rival systems that also use radar or lidar, regulators are examining whether this approach reduces the system’s ability to function reliably in challenging conditions.

Tesla has told the agency that three of the nine crashes under review would likely not have occurred with newer over-the-air updates to its Full Self-Driving (FSD) software.

Pressure builds as Tesla shifts strategy

The heightened scrutiny comes at a pivotal moment for the company. With vehicle sales under pressure, Tesla has been increasingly positioning autonomous driving as central to its long-term business.

CEO Elon Musk has said Tesla plans to roll out a robotaxi service in multiple U.S. cities later this year, with vehicles operating without a human driver. The company is also preparing to begin production of its “Cybercab", a model designed without a steering wheel or pedals, as early as next month. The regulatory escalation adds uncertainty to those plans, particularly as safety concerns remain under review.

FSD naming and driver responsibility

Tesla’s driver-assistance system has also faced criticism over how it is marketed. Previously called “Full Self-Driving," regulators and safety experts have argued the name overstates its capabilities, as drivers are still required to remain attentive at all times.

The company has since updated the branding to “Full Self-Driving (Supervised)," though the system continues to operate as an advanced driver-assistance feature rather than a fully autonomous solution.

Multiple probes underway

This is not the only investigation Tesla is dealing with. U.S. regulators are also examining reports of FSD-equipped vehicles failing to stop at red lights, as well as separate concerns over door handles that allegedly malfunctioned during crashes, trapping occupants inside. Tesla has not responded to requests for comment on the latest escalation. Following the news, the company’s stock fell 3.2% to $380.30.

(With inputs from AP)

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