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Tesla Recalls 360,000 Cars Equipped with Full Self-Driving Beta Software

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Tesla, Inc. (TSLA) will recall 362,758 cars after federal regulators found its Full Self-Driving (FSD) Beta software could cause crashes, accounting for about 90% of Tesla vehicles using the software for city streets.

Key Takeaways

  • Tesla to recall more than 360,000 cars after regulators found Full Self-Driving Beta software can cause crashes.
  • The recall affects 2016-2023 Model S and Model X, 2017-2023 Model 3, and 2020-2023 Model Y cars with the software or those pending software installation.
  • Regulators said the software caused cars to exceed speed limits, or behave in an unsafe or unpredictable manner while navigating intersections.

The software caused the Tesla cars to “exceed speed limits” or travel in an “unsafe” or “unpredictable” manner while navigating intersections, according to a recall notice posted on the National Highway Traffic Safety Administration’s (NHTSA) website Thursday.

“The FSD Beta system may allow the vehicle to act unsafe around intersections, such as traveling straight through an intersection while in a turn-only lane, entering a stop sign-controlled intersection without coming to a complete stop, or proceeding into an intersection during a steady yellow traffic signal without due caution. In addition, 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,” said the NHTSA.

The recall will impact cars that have deployed the FSD beta software or are pending installation. The recall applies to vehicles of the following years and models: 2016-2023 Model S; 2017-2023 Model X and Model 3; 2020-2023 Model Y. The company will deploy a free “over-the-air (OTA) software update” and notify car owners via letter by April 15.

FSD Beta is Tesla’s most advanced autopilot software, giving drivers access to features that aren’t fully debugged. Drivers can pay a $15,000 lump sum to activate FSD Beta or subscribe for $99/month or $199/month depending on their prior purchases.

Tesla reported $324 million of FSD-related revenue in the fourth quarter of 2022, according to SEC filings.

This isn’t the first time Tesla has had to recall cars due to issues with FSD software. Tesla recalled almost 54,000 cars last year after the NHTSA found FSD Beta could allow a car to perform a rolling stop, in which it fails to make a complete stop at a stop sign.

Tesla stock fell more than 5% on Thursday, ending a run of gains that helped it reach a three-month high on Wednesday.