The NHTSA just handed Tesla five more weeks to explain why its
cars keep running red lights. The federal safety agency
extended Tesla's deadline to respond to any investigation
into full self driving traffic violations until February 23rd,
giving the company time to manually review 8313 records of
potential incidents. And Tesla says it can only
process about 300 records per day.
In the original January 19th deadline landed right in the
middle of a holiday. But this extension arrives at a
precarious moment for the automaker.
Elon Musk announced 2 days ago that Tesla will stop selling FSD
as a one time purchase after February 14th, forcing all new
customers between $99 monthly subscription.
Now, is that date a coincidence, or is Tesla quietly
repositioning its most controversial product before
regulators close in? The February 14th deadline is
the same day California's DMV gave Tesla to fix its misleading
Autopilot marketing or face a 30 day sales suspension.
We're going to go and breakdown what NHTSA is actually
investigating, why Tesla is drowning in regulatory requests,
and how the subscription pivot might be a legal hedge as much
as a business strategy. We will also look at why only
12% of Tesla owners have ever paid for FSD, what that means
for Musk's robotaxi, and we'll get right into that right after
this very short break. Now, the federal investigation
into FSD traffic violations now covers 2.9 million Tesla
vehicles, essentially every car equipped with a system now.
NHTSA opened the probe in October after collecting dozens
of reports of Teslas running red lights, driving in the wrong
direction, and making illegal lane changes while FSD was
engaged. The agency has since logged 62
customer complaints, 14 Tesla submitted reports and four media
accounts of incidents. Some drivers reported their cars
gave no warning before behaving erratically.
Tesla's defense has remained consistent.
They say that the company argues it has repeatedly told drivers
the system cannot drive cars by themselves.
Whoever sits behind the wheel must remain attentive and ready
to intervene at all times. Now, that language appears in
Tesla's documentation and owner manuals.
The company classifieds FSD as an SAE Level 2 partial
automation system, meaning the driver retains full
responsibility for operating the vehicle and complying with
traffic laws at all times. But let's point out that the
product name is Full Self Driving.
Calling something Full Self Driving when it requires
constant given supervision creates a perception gap that
regulators find increasingly problematic.
California's DMV ruled last month that Tesla's marketing was
deceptive under state law, concluding that reasonable
consumers can mistakenly believe that cars can operate all by
themselves without human oversight.
Administrative Judge Juliet Cox found that Tesla's promotional
language implied levels of autonomous capabilities the cars
simply cannot do, and they cannot possess this now.
The investigation centers on specific failure modes that put
drivers and other road users at risk.
NHTSA documents describe Tesla's entering turn only lanes and
proceeding straight through intersections in violation of
lane markings. Others executed turns from
through lanes despite clear directional signals and peanut
arrows. Some vehicles changed lanes
directly into opposing traffic with minimal notice to drivers,
creating immediate collision hazards.
One pattern emerged from a cluster of complaints in Joppa,
MD, where multiple drivers reported the same intersection
triggered erratic behavior. Tesla claims it has since
addressed the issue at that specific location, but the
geographic spread of other incidents suggests systemic
problems rather than isolated bugs.
The agency is particularly interested in whether FSD
provides adequate warnings before these maneuvers, and many
incident reports suggest the system acted without alerting
the driver to its intended behavior, leaving no time for
the driver to intervene. Tesla requested the extension on
January 12th, explaining that the original deadline gave it
barely over a month to compile comprehensive data.
The company told regulators that nearly two weeks of that window
overlapped with major holidays, and keyword searches for traffic
violations return massive volumes of unrelated records.
Manually sorting through 8313 remaining items at 300 per day
requires approximately 28 additional days.
NHTSA granted the full 5 weeks test that requested.
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This SFSD probe is just one of three major NHTSA investigations
Tesla is juggling juggling right now.
The company also faces probes into delayed crash reporting and
inoperative door handles on Model 3 vehicles.
Tesla told regulators that responding to three large
information requests in short order is unduly burdensome and
affects the quality of responses, and the door handle
investigation alone covers roughly 179,000 vehicles from
2022. Now, a separate probe in FS DS
ability to handle reduced visibility conditions like fog
and sun glare has been running since October 2024.
And after multiple crashes, including one fatality that's
right on the books and the subscription announcement that's
a new one, that's great. January 14th caught everybody
off guard. Didn't expect this, but there's
a pattern here. California's DMV gave Tesla 60
days to fix its deceptive marketing starting December
16th. 60 Days Later falls on February 14th, Valentine's Day,
the exact date the Elon Musk chose to end one time FSD
purchases. Moving to subscription only
detaches Tesla from the promise that buyers were purchasing a
future proof autonomous capability.
Subscription customers pay for what FSD delivers today, a Level
2 driving assistance assistance system, nothing more.
That distinction matters in courtrooms and regulatory
hearings, where Tesla faces accusations of overselling a
product that has never matched its name.
Now the one time purchase option created legal exposure.
Tesla no longer wants to carry. They don't want that burden.
And for years, Tesla told buyers, Elon Musk told buyers
that their cars would eventually become robo taxis worth hundreds
of thousands of dollars and that FSD prices would keep rising as
the software improved. Neither prediction is true at
all. You can't use your car as a robo
taxi right now. You might not be able to for the
next 5 years if possible. FSD peaked at $15,000 in late
2022 before Tesla cut its price to 8000 in 2024.
The subscription dropped from 199 to $99 monthly during the
same period. And at current pricing, buying
FSD outright only made sense if you believed in the autonomy
promise, since it would take nearly seven years of $99
monthly payments to break even at 8 grand.
Some people would prefer the $99, right?
Most car buyers do not keep their vehicles that long.
The promise faces existential pressure from straight
regulators too. Federal investigators and class
action lawyers who allege Tesla deceived them after the
technology's capabilities were not realized after years now.
Musk also admitted on a recent earnings called the hardware 3
vehicles. A significant portion of its
existing fleet cannot achieve full autonomy as originally
promised. Those owners were told their
cars had all the hardware needed to become full self driving with
future software updates. Now, Tesla says some will need
retrofits, though no detailed upgrade plans have been
announced. Moving to subscription only
eliminates ongoing commitments to driver and delivery
capabilities that the company may never achieve on legacy
hardware. New subscription customers get
what FSD delivers today without any implied promise about the
future and tomorrow, and Tesla Score business provides the
financial context for why FSD performance carries such weight.
The company delivered 1.64 million vehicles in 2025, down
9% for the prior year. Chinese rival BYD sold 2.26
million EVs during the same period, claiming the title Tesla
held for years. CFO of Tesla disclosed in
October that only about 12% of Tesla fleets has paid for FSD.
Boasting that take rate became a key milestone in Musk's new $1
trillion compensation package, which requires 10 million active
FSD subscriptions before 2035 for his stock awards to fully
vest. Lower upfront costs through
subscription only access could theoretically Dr. adoption,
though the regulatory scrutiny may offset any marketing
benefits. Waymo continues pulling ahead in
the robotaxi race. Tesla once seemed destined to
dominate. Alpha's autonomous vehicle
division now completes over 450,000 paid rides per week
across Austin, San Francisco, Phoenix, Atlanta and LA.
Expansion into London and Tokyo is planned for 2026.
And now Tesla launched supervised robo taxi testing in
Austin last year and offers ride hailing with human drivers in
San Francisco. But the company still lacks the
permits required to test or operate autonomous vehicles
without a safety driver in California, the state where
Tesla builds half a million cars annually, is the same state
threatening to suspend its sales license over marketing language.
The NHTSA will likely seek another extension request from
Tesla after the February 23 deadline passes.
The company has already signalled it will ask for more
time to provide detailed information about each
complaint, including software versions, driver alerts and
crash outcomes. The agency wants timelines for
every incident starting 30 seconds before the initial
violation and ending with a final violation, driver
disengagement or crash. The level of granularity across
thousands of records will take months to compile, according to
Tesla. But they do have access to XAI,
so that could be a thing they could use to speed up this
process. The investigation could easily
stretch through 2026 while Tesla simultaneously fights
California's marketing requirements and prepares for
its earnings report next week.