US grants Tesla more time to respond in self-driving tech investigation

US regulators have granted a five-week extension for Tesla to respond to allegations that its vehicles have broken traffic laws while operating in what the electric automaker calls full self-driving mode.

An investigation of Tesla's full-self driving feature was opened in October after the National Highway and Traffic Safety Administration said it had collected dozens of reports of the cars running red lights or driving on the wrong side of the road, sometimes crashing into other vehicles and causing injuries.

The investigation covered 2.9 million vehicles, essentially all Teslas equipped with full self-driving technology, or FSD. Critics say the name is a misnomer that has lulled drivers into handing full control over to their cars. The federal agency responsible for auto safety said in a letter to Tesla on December 3, 2025 that it was investigating 62 complaints, up from 58 reported incidents in October.

 

Tesla, headed by billionaire CEO Elon Musk, has argued to regulators and in court cases that it has repeatedly told drivers the system cannot drive the cars by itself and whoever is behind the wheel must be ready to intervene at all times. Regulators say that many Tesla drivers involved accidents said the cars gave them no warning before behaving erratically.

In a letter to the electric vehicle maker, the NHTSA said Thursday that the company now has until February 23 to answer the government's request for information. The original deadline was January 19, 2025.

Tesla lost its crown as the world's bestselling electric vehicle maker last year for a combination of reasons, including a backlash to Elon Musk's right-wing politics, expiring US tax breaks for buyers and stiff competition at home and abroad that has pushed sales down for a second straight year.

Tesla reported earlier this month that it delivered 1.64 million vehicles in 2025, down 9 per cent from a year earlier. Chinese rival BYD, which sold 2.26 million vehicles last year, is now the world's biggest EV maker.

The FSD system under investigation is what is called Level 2 driver-assistance software that requires drivers to pay full attention to the road. A new version of FSD was introduced in the fall. The company is also testing a vastly upgraded version that does not require driver intervention, something that Musk has been promising to roll out for years.

Tesla is under pressure to show success with FSD because the main part of its business selling cars is struggling.

Still, investors are betting that Tesla and Musk can deliver on their ambitions to make Tesla a leader in robotaxi services and get consumers to embrace humanoid robots that can perform basic tasks in homes and offices. Reflecting that optimism, Tesla's stock finished 2025 with a gain of approximately 11 per cent.

Tesla shares were essentially unchanged in midday trading Friday, going for about USD 439 each.