Federal regulators have launched a new investigation into Tesla’s Full Self-Driving (FSD) feature following dozens of incidents in which the cars ran red lights, drove on the wrong side of the road, and crashed.
The National Highway Traffic Safety Administration said the probe covers 58 incidents that resulted in more than a dozen crashes, multiple fires, and nearly two dozen injuries.
“The ultimate question is, ‘Does the software work?’” said Seth Goldstein, a Morningstar analyst with a sell rating on Tesla stock.
Ross Gerber, a money manager and longtime 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 probe adds to several ongoing investigations into Tesla technology that could upend Musk’s plans to turn millions of vehicles on the road into fully driverless cars through over-the-air software updates.
Musk has promised to roll out hundreds of thousands of driverless taxis in U.S. cities by the end of next year, a plan now under scrutiny as regulators dig deeper into FSD’s safety record, per the Associated Press.
The new investigation covers 2.9 million Tesla vehicles equipped with Full Self-Driving technology. Tesla has repeatedly told regulators and courts that the system cannot operate without a driver and that drivers must be ready to intervene at all times.
However, regulators reported that many drivers involved in accidents said the cars gave them no warning about unexpected behavior.
Tesla stock fell nearly 3% on the news but closed down just 0.7%.
NHTSA previously opened an investigation last year into driver-assistance features in 2.4 million Teslas after crashes in fog and other low-visibility conditions, including a fatal pedestrian accident. Earlier this year, the agency investigated Tesla’s “summon” technology after multiple fender benders in parking lots.
Another probe launched in August looked into why Tesla had not been reporting crashes promptly as required.
That same month, a Miami jury found Tesla partly responsible for a deadly 2019 crash involving its Autopilot driver-assist technology and awarded victims more than $240 million in damages. Tesla has said it will appeal.
Gerber criticized the company’s marketing, saying the FSD system should not be called “full self-driving.”
“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,’” Gerber said.
The FSD system under investigation is a Level 2 driver-assistance software that requires drivers to remain fully attentive. Tesla introduced a new version earlier this week and is testing a vastly upgraded version that does not require driver intervention, something Musk has promised for years.
Tesla faces mounting pressure as the core business of selling cars struggles. European customers opposed to Musk’s support of Trump and far-right candidates have boycotted the company, while rival EV makers, including China’s BYD, are taking market share with cheaper, high-quality options.
In response, Musk announced stripped-down, cheaper versions of existing models, including the Model Y, but investors reacted negatively, pushing Tesla stock down 4.5%.
