Tesla Inc. is recalling hundreds of thousands of vehicles after U.S. authorities said its automated-driving technology could increase the risk of a crash.

The automaker’s so-called Full Self-Driving Beta system “may allow the vehicle to act unsafe around intersections,” including traveling straight through from a turn lane and proceeding through steady-yellow traffic lights, according to a filing on February 16th with the U.S. National Highway Traffic Safety Administration. 

The system’s errors “increase the risk of a collision if the driver does not intervene,” the filing said.

The recall affects 362,758 vehicles, including certain Model 3, Model X, Model Y and Model S units manufactured between 2016 and 2023. Tesla is expected to fix the issue through an over-the-air software update by April 15th, NHTSA said.

The agency’s concerns raise new questions about a system that Tesla Chief Executive Officer Elon Musk sees as critical to the company’s long-term prospects. 

“The overwhelming focus is on solving full self-driving,” Musk said in a June 2022 interview with Tesla fans on YouTube. “That’s essential. It’s really the difference between Tesla being worth a lot of money or worth basically zero.”

While Musk didn’t address the specifics of NHTSA’s filing, he tweeted on February 16th that the term “recall” was “flat wrong” since the issues can be fixed with a software update.

The company’s automated-driving technology is already under scrutiny from Washington.

NHTSA has been looking into how it handles crash scenes since 2021 after a dozen collisions with first responders and other vehicles. The agency also opened an investigation last year into complaints of Tesla cars with Autopilot driver-assist that suddenly brake at high speeds.

NHTSA said in a separate statement on February 16th that its investigations of Tesla’s Autopilot are still active.

The company has also been accused of exaggerating the capabilities of its technology.

“The main problems for Tesla’s system include the misleading names of ‘Full Self-Driving’ and ‘Autopilot,’” said David Harkey, president of the Insurance Institute for Highway Safety. He added that Tesla “does not have adequate safeguards to ensure drivers will pay full attention to the road.”

The company’s website stresses that its autonomous features like Autopilot and Full Self-Driving “require active driver supervision and do not make the vehicle autonomous.”

Tesla shares turned negative after the recall notice, falling 5.7% by market close on February 16th.

‘Potential Concerns’

The agency said it first notified Tesla on January 25th that it had identified “potential concerns related to certain operational characteristics of FSD Beta in four specific roadway environments” and requested that the automaker file a recall. 

Tesla met with the agency multiple times in the following days. The company did not concur with the agency’s analysis, but decided on February 7th to move forward with the recall “out of an abundance of caution,” according to NHTSA.

Representatives of Tesla didn’t immediately respond to requests for comment.

Tesla identified 18 warranty claims between May 2019 and September 2022 that “may be related” to the conditions NHTSA was concerned about, but told the agency it is not aware of any injuries or deaths related to the defect.

“It’s encouraging that Tesla is not trying to fight this and is working with NHTSA,” said Missy Cummings, a professor at George Mason University who specializes in autonomous systems and spent a year at the agency. “It’s a good sign that the company is maturing.”