Tesla has reportedly settled a lawsuit stemming from a fatal 2023 incident involving one of its vehicles utilising the company's advanced driver assistance system, known as Full Self-Driving (FSD). While the terms of the settlement have not been disclosed, the agreement brings an end to the legal action initiated by the family of the deceased.
The lawsuit was filed against Tesla and the driver by the daughter of Johna Story, a 71-year-old woman who tragically lost her life after being struck by a Tesla Model Y. Ms Story had exited her own vehicle to assist in directing traffic following an earlier crash, which was attributed to sun glare, when the incident occurred.
This settlement takes place against a backdrop of ongoing scrutiny from US federal authorities. The National Highway Traffic Safety Administration (NHTSA) opened an investigation into Tesla's FSD (Supervised) automated driving software in 2024. This initial probe was triggered by four reported crashes in low visibility conditions, including the one involving Ms Story, with the agency seeking to determine if the system could 'detect and respond appropriately to reduced roadway visibility conditions' such as sun glare, fog, or airborne dust.
The NHTSA subsequently escalated this investigation in March 2026 to an engineering analysis, indicating a more intensive examination. In its report, the agency expressed 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.' This upgraded investigation remains open, with potential outcomes for Tesla including a vehicle recall.
Furthermore, the federal agency initiated a separate investigation into FSD in October 2025. This second probe was launched after receiving multiple reports alleging that the software caused vehicles to run red lights or veer into incorrect lanes, raising further questions about the system's reliability and safety protocols.