NHTSA investigation – Tesla has settled a lawsuit tied to a fatal 2023 crash involving its Full Self-Driving system, but the federal investigation into the software is still active—including an upgraded engineering analysis that flagged concerns about how it handles reduced visibil
By the time the settlement reached the family, the questions had already outgrown the courtroom.
Tesla has settled a lawsuit connected to a fatal 2023 crash involving a vehicle using the company’s advanced driver assistance system known as Full Self-Driving. Bloomberg was first to report on the settlement, and the terms were not disclosed.
The lawsuit had been filed against Tesla and the driver by the daughter of Johna Story, a 71-year-old woman who was struck by a Tesla Model Y. Story was hit after she stepped out of her own vehicle to direct traffic around a crash that had occurred earlier due to sun glare.
For Tesla, the settlement doesn’t end the wider scrutiny of its system. The National Highway Traffic Safety Administration (NHTSA) opened an investigation into Tesla’s FSD (Supervised) automated driving software in 2024 after four reported crashes in low visibility conditions—including the one involving Story. At the time. the agency said it was investigating the driver assistance system to find out whether it could “detect and respond appropriately to reduced roadway visibility conditions. ” such as “sun glare. fog. or airborne dust.”.
That investigation was upgraded in March 2026 to an engineering analysis. In that report. the agency wrote: “Available incident data raise concerns that Tesla’s degradation detection system. both as originally deployed and later updated. fails to detect and/or warn the driver appropriately under degraded visibility conditions such as glare and airborne obscurants.”.
The family’s lawsuit is over because of the settlement, but the federal investigation is still open. For Tesla, the potential consequences tied to the upgraded NHTSA review include possible outcomes such as a recall.
The regulatory pressure has also broadened beyond the sun-glare scenario. The federal agency opened an investigation into FSD in October 2025 after receiving reports the software caused vehicles to run red lights or cross into the wrong lane.
Tesla FSD Full Self-Driving NHTSA Supervised lawsuit settlement Johna Story Model Y sun glare degraded visibility recall red lights