Tesla FSD faces more trouble as government opens investigation

There are seemingly two versions of Tesla's  (TSLA) Full Self-Driving and Autopilot advanced driver assistance systems (ADAS).

There’s the version that Tesla uses to sell the system to the public, and there’s the reality of what the system can do that was laid bare during the company’s recent lawsuit.

In March, Tesla CEO Elon Musk tweeted: "FSD beta build V8.1 normally drives me around with no interventions. Next version is a big step change beyond that. Tesla is solving a major part of real world AI. This is not widely known."

Related: $243 million Tesla Autopilot lawsuit lawyer has message for Elon Musk

But in court, Tesla sang a different, less confident tune.

"Tesla in the showroom tells you that they’ve invented the greatest full self-driving car the world has ever seen. Mr. Musk has been peddling to consumers and investors for more than a decade that the cars are fully self driving and that the hardware is capable of full autonomy. And those statements were as untrue the day he said them as they remain untrue today," said Brett Schreiber, litigator for the plaintiffs in the recent $243 million jury verdict against Tesla over a 2019 fatal crash in Key Largo, Florida.

"But then they showed up in a courtroom and they say, 'No, no, no, this is nothing but a driver assistance feature.'"

Tesla shareholders are fed up with Robotaxi promises

Earlier this month, a group of Tesla shareholders sued the company and CEO Elon Musk because the company wasn’t completely honest about the problems with Robotaxi.

The class action suit covers investors who purchased Tesla shares between April 19, 2023, and June 22, 2025. The class action is seeking damages for broken promises.

The lawsuit alleges "Tesla overstated the effectiveness of its autonomous driving technology; there was thus a significant risk that the company’s autonomous driving vehicles, including the Robotaxi, would operate dangerously and/or in violation of traffic laws."

Related: GM's tech czar has a novel view of what AI can do

This gap between promises and deliverability leaves the company open to litigation and "heightened regulatory scrutiny."

This week, the National Highway Traffic Safety Administration (NHTSA) added to Tesla’s regulatory burden. The agency already has numerous investigations into Tesla's ADAS system, but on Aug. 21, it revealed another one.

This time, the issue is the timeliness of Tesla's reports on crashes that involve Full Set-Driving and Autopilot.

Electrek reported on the Office of Defects Investigation resume from August 19, showing that the agency is investigating "numerous incident reports submitted by Tesla in response to Standing General Order 2021-01, in which the reported crashes occurred several months or more before the dates of the reports."

The official notice makes it clear that the opening of this audit query "is a standard process for reviewing compliance with legal requirements" and that Tesla says the issue is data collection and has already been fixed.

But Electrek points out that Tesla received data about the Key Largo crash immediately after it happened. It was an important sticking point in the trial, as the Tesla computer was shown to delete the local file of the crash, while immediately uploading the incident to Tesla's servers.

Tesla Robotaxi shareholder lawsuit uses social media videos to prove point

Tesla shareholders say that Elon Musk's public declarations about ADAS tech don't match reality, and they're relying on public social posts to make their point.

A June 22 post on X (the former Twitter) by @BradMunchen says: "Watch the Tesla try to turn where it's not supposed to at around 18 seconds into the video."

The lawsuit quotes a Bloomberg report: "Tesla Inc.'s self-driving taxis appeared to violate traffic laws during the company's first day offering paid rides, with one customer capturing footage of a left turn gone wrong and others traveling in cars that exceeded posted speed limits."

More Tesla lawsuits:

• Tesla lands in more hot water over Elon Musk's Full Self Driving claims
• Tesla's history of settling Autopilot claims before $243 million lawsuit
• Tesla faces another lawsuit after $323 million autopilot verdict

Following that first weekend, Tesla's share price fell 6% over the subsequent two sessions, costing shareholders money. 

The lawsuit also references another recent nine-figure court judgment against the company.

Morand v. Tesla Inc. is being litigated in the U.S. District Court for the Western District of Texas. 

Related: Elon Musk abandons political project before it gets off the ground