US Stock Market Move | Tesla shares fall nearly 3% as FSD investigation is upgraded, recall risk rises.

On Thursday, Tesla, Inc. (TSLA.US) fell nearly 3% to $381.42. On the news front, the National Highway Traffic Safety Administration (NHTSA) upgraded its investigation into Tesla, Inc.'s partially automated driving system known as "Full Self-Driving" (FSD), citing multiple accidents indicating potential flaws in the technology under reduced visibility conditions. The latest memorandum released by the NHTSA disclosed a total of 9 accidents involving Tesla, Inc.'s automated driving system, higher than the 4 accidents when the investigation was first launched in 2024. Among the accidents reviewed by the NHTSA, "Tesla, Inc.'s FSD failed to detect common road conditions that obstructed its view and did not alert when the camera performance degraded, issuing an alert only just before the accident occurred." This could provide the basis for the NHTSA ultimately seeking a recall, and it strengthens the scrutiny of the technology on which Tesla, Inc.'s future automated driving and autonomous taxi operations rely. The NHTSA also stated that Tesla, Inc. referenced limitations in its data and labeling when trying to identify more incidents similar to these accidents, which the NHTSA believes could result in an underestimation of the number of accidents during certain periods.