Tesla recalls 362,000 US vehicles over Full Self-Driving software

TESLA said it would recall 362,000 US vehicles to update its Full Self-Driving (FSD) Beta software after US regulators said on Thursday (Feb 16) the driver assistance system did not adequately adhere to traffic safety laws and could cause crashes.

The National Highway Traffic Safety Administration (NHTSA) said the Tesla software allows a vehicle to “exceed speed limits or travel through intersections in an unlawful or unpredictable manner increases the risk of a crash”.

Tesla will release an over-the-air (OTA) software update free of charge, and the electric vehicle (EV) maker said it is not aware of any injuries or deaths that may be related to the recall issue. The automaker said it had 18 warranty claims.

The recall covers 2016-2023 Model S and Model X vehicles, 2017-2023 Model 3, and 2020-2023 Model Y vehicles equipped with FSD Beta software or pending installation.

Tesla shares were down 3.6 per cent at US$206.62 on Thursday afternoon. It was among the most actively traded stocks on US exchanges.

This is a fresh setback for Tesla’s driver assistance system, which faces regulatory and public scrutiny. Chief executive Elon Musk has repeatedly missed his own targets to achieve self-driving capability, which he has touted as a potential cash cow.

NHTSA asked Tesla to recall the vehicles, but the company said despite the recall it did not concur with NHTSA’s analysis. The move is a rare intervention by federal regulators in a real-world testing programme that the company sees as crucial to the development of cars that can drive themselves.

US senators Ed Markey and Richard Blumenthal, both Democrats, said the recall was “long overdue”, adding, “Tesla must finally stop overstating the real capabilities of its vehicles”.

The recall comes less than two weeks before the company’s Mar 1 investor day, during which Musk is expected to promote the EV maker’s artificial intelligence (AI) capability and plans to expand its vehicle lineup.

While Tesla’s Autopilot feature assists with steering, accelerating and braking for other vehicles and pedestrians within its lane, the company says FSD is a more advanced system “designed to provide more active guidance and assisted driving” under active supervision of the driver.

Tesla reported having US$2.9 billion in deferred revenue at the end of 2022 related to “access to our FSD features, Internet connectivity, free Supercharging programmes and over-the-air software updates primarily on automotive sales”.

Tesla could not be reached for comment, but Musk tweeted on Thursday that the word “recall” for an over-the-air software update is “anachronistic and just flat wrong!”

Tesla released FSD Beta to nearly all of its 400,000 FSD customers in the United States and Canada in the fourth quarter, when it recognised FSD revenue of US$324 million. It said it expects to recognise nearly US$1 billion of deferred revenue that remains over time as software updates are delivered.

Ongoing probes

Musk has positioned FSD technology as one of several AI initiatives at Tesla.

Last May, in an interview with members of a Tesla owners club, Musk called full self-driving “essential” for the company. “It’s really the difference between Tesla being worth a lot of money or worth basically zero.”

NHTSA has an ongoing investigation it opened in 2021 into 830,000 Tesla vehicles with driver assistance system Autopilot over a string of crashes with parked emergency vehicles. NHTSA is reviewing whether Tesla vehicles adequately ensure drivers are paying attention. NHTSA said on Thursday despite the FSD recall its “investigation into Tesla’s Autopilot and associated vehicle systems remains open and active.”

Tesla said in “certain rare circumstances ... the feature could potentially infringe upon local traffic laws or customs while executing certain driving manoeuvres”.

Possible situations where the problem could occur include travelling or turning through certain intersections during a yellow traffic light and making a lane change out of certain turn-only lanes to continue travelling straight, NHTSA said.

NHTSA said: “The system may respond insufficiently to changes in posted speed limits or not adequately account for the driver’s adjustment of the vehicle’s speed to exceed posted speed limits.”

Last year, Tesla recalled nearly 54,000 US vehicles with FSD Beta software that may allow some models to conduct “rolling stops” and not come to a complete stop at some intersections, posing a safety risk, NHTSA said.

Tesla and NHTSA say FSD’s advanced driving features do not make the cars autonomous and require drivers to pay attention.

In December, NHTSA opened two new special investigations into crashes involving Tesla vehicles, including an eight-vehicle crash in San Francisco on the Bay Bridge in which a driver reported the FSD feature had malfunctioned.

Since 2016, NHTSA has opened more than three dozen investigations involving Tesla crashes where advanced driver assistance systems were suspected of use and 19 deaths were reported. REUTERS

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