NHTSA upgrades Tesla FSD probe one step short of recall

The National Highway Traffic Safety Administration (NHTSA) has escalated its investigation into Tesla’s Full Self-Driving (FSD) system to an engineering analysis covering an estimated 3.2 million vehicles, the final investigative stage before the agency can request a recall. The probe, first opened in October 2024 following four crashes in reduced visibility conditions, has expanded to cover nine incidents including one fatality and two injuries, with six further crashes under review.

NHTSA’s central finding is that FSD’s degradation detection system—that is, the software designed to alert drivers when camera performance is compromised—failed to identify common conditions including sun glare, dust, and airborne obstructions until immediately before impact. In multiple incidents, the system also lost track of or never detected a lead vehicle in its path. The conditions involved are not exceptional edge cases, but routine driving environments that camera-based systems are required to identify immediately for the sake of safe operation.

The timeline of Tesla’s response is among the more revealing details in the NHTSA documentation. A fatal FSD crash involving reduced visibility occurred on 28 November 2023, and Tesla submitted the required crash report fully seven months later on 27 June 2024. Development of an update to the degradation detection system began the following day. Tesla’s own analysis subsequently acknowledged that the updated system, had it been installed at the time, would only have affected three of the nine identified crashes.

NHTSA also flagged concerns about Tesla potentially under-reporting its crash rates, noting that Tesla cited internal “data and labelling limitations” that may have caused it to miss crashes during portions of the defined investigation period. This appears to fit a pattern of behaviour for Tesla, which is peculiar among self-driving players in its requesting regulators to redact information from public view on the premise of business confidentiality. 

One of Tesla’s engineers testified during hearings in a 2025 Florida lawsuit that the automaker failed to maintain crash records involving its technology until March 2018. That lawsuit concerned a fatal crash involving Autopilot, and Tesla was found liable for fines of US$243m. The automaker then sought to appeal these fines; it lost.

The NHTSA probe is the third concurrent federal investigation into FSD, alongside a separate probe into traffic violations including red-light running, and a further inquiry into Tesla’s crash reporting practices. The automaker was noticeably absent from a recent NHTSA forum designed to inform future autonomous driving guidelines. Executives from Waymo, Zoox and Aurora attended instead.

Chief Executive Elon Musk has taken pains in recent years to hitch his company’s stratospheric valuation to its ability to successfully deliver autonomous driving with an AI-first camera vision-only perception system. Its ability to deliver autonomous driving, he said, will determine whether it is worth a great deal or “basically zero”.