Tesla is updating software on some 362,000 vehicles due to its Full Self-Driving software potentially causing crashes, the National Highway Traffic Safety Administration announced Thursday. TSLA shares dropped late Thursday.
The National Highway Traffic Safety Administration reported Thursday the Tesla Full Self-Driving software allows a vehicle to "exceed speed limits or travel through intersections in an unlawful or unpredictable manner increases the risk of a crash." NHTSA said 362,758 Tesla vehicles could potentially be affected.
The agency wrote Thursday Tesla will release an "over-the-air" software update, free of charge on "certain 2016-2023 Model S, Model X, 2017-2023 Model 3, and 2020-2023 Model Y vehicles equipped with Full Self-Driving Beta (FSD Beta) software or pending installation."
Tesla disputes the agency's analysis of the problem but will carry out the FSD fix, according to NHTSA documents.
CEO Elon Musk on Twitter pushed back on the idea a software update constitutes a recall. The Tesla CEO was responding to a tweet by Sam Korus, the director of Research Autonomous Technology & Robotics at ARK Invest.
"The word 'recall' for an over-the-air software update is anachronistic and just flat wrong!" Musk tweeted Thursday afternoon.
Futures Fall On Inflation; Tesla Extends Loss On FSD Recall
Tesla Stock
Tesla stock fell 5.7% to 201.97 in Thursday's market trading. On Wednesday, shares had advanced 2.4%. Tesla stock has more than doubled from its Jan. 6 bear market low of 101.81.
The NHTSA is conducting a wide-ranging investigation into FSD and Autopilot. The Justice Department is conducting a criminal probe over Tesla's FSD claims. Musk has claimed for years that Tesla is on the cusp of complete self-driving.
Musk told investors on Jan. 25 that Tesla has deployed Full Self-Driving Beta for city streets to roughly 400,000 customers in North America. The Tesla CEO added almost all Tesla vehicles currently can have self-driving software uploaded to them.
"We would not have released the FSD Beta if the safety statistics were not excellent," Musk said.
TSLA shares rank fourth in IBD's Auto Manufacturers industry group. Tesla stock has a 71 Composite Rating out of 99. The stock also has a 24 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement. The EPS Rating is 99.
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