: Tesla to recall more than 2 million vehicles over concerns about Autopilot and drivers’ attention

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Tesla Inc.’s stock fell nearly 2% Wednesday, after federal regulators said the electric-vehicle company was recalling more than 2 million vehicles over Autopilot control issues.

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will add additional control and alerts to “further encourage the driver to adhere to their continuous driving responsibility whenever Autosteer is engaged” and prevent “misuse,” the National Highway Traffic Safety Administration said in the recall notice.

Autosteer is one of the features of Autopilot, Tesla’s suite of advanced driver-assistance systems meant for highway driving. Tesla will add the guardrails with an over-the-air software update at no cost to owners, the NHTSA said.

“In certain circumstances when Autosteer is engaged, and the driver does not maintain responsibility for vehicle operation and is unprepared to intervene as necessary or fails to recognize when Autosteer is canceled or not engaged, there may be an increased risk of a crash,” NHTSA said.

NHTSA investigated the issue for more than two years, and Tesla did not agree with the agency’s findings. It was not immediately clear how drivers’ experience using Autopilot would change after the fixes, and Tesla did not return a request for comment.

The NHTSA said in the notice that depending on vehicle hardware, additional controls would include “increasing the prominence of visual alerts” and suspending Autosteer “if the driver repeatedly fails to demonstrate continuous and sustained driving responsibility while the feature is engaged.”

CFRA analyst Garrett Nelson said that the recall news appeared to be “a non-event for Tesla,” as it was “merely a quick, over-the-air update of Autopilot software.”

At Wedbush, analyst Dan Ives said the move is a step in the right direction.

“Our take is this tug of war with the NHTSA might now finally head in the right direction for Tesla,’ he wrote in a note to clients.

In our opinion FSD represents the holy grail for Musk & Co. over the coming years and we believe after some successful new releases of this software that Tesla is heading down the right path to where FSD will start to become a reality over the next few years and will be a major valuation addition to the sum-of-the-parts thesis for Tesla,” said Ives, who has an outperform rating on the stock.

See also: The Tesla Cybertruck is finally here; prices start around $61,000

Included in the recall are Model S sedans made between 2012 and 2023, Model X SUVs made between 2016 and 2023, Model 3 compact sedans made between 2017 and 2023, and Model Y compact SUVs made between 2020 and 2023.

Tesla’s Autopilot — and, more recently, Full Self Driving, Tesla’s ADAS suite for city driving — have been under criticism for implying bigger capabilities than they have in reality. The company has maintained that it makes clear that drivers have to be alert at all times and not fully rely on the automation.

The ADAS systems have been the focus of numerous federal and state investigations, including ongoing probes from NHTSA and reportedly from the California attorney general’s office. In October, Tesla disclosed a Justice Department investigation into both Autopilot and Full Self Driving.

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Meanwhile, the stock has gained 92.4% in the year to date, compared with a 21% gain for the S&P 500
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