Tesla has settled a lawsuit related to a fatal accident involving its Full Self-Driving (FSD) system. The victim, Johna Story, was struck by a Tesla Model Y after stepping out of her vehicle to direct traffic following an earlier crash due to sun glare.

The National Highway Traffic Safety Administration (NHTSA) began investigating FSD in 2024, with the case escalating to an engineering analysis in March 2026. The report suggested Tesla’s system may not adequately detect or warn drivers during conditions of reduced visibility like glare and fog.

While the settlement ends this legal battle, NHTSA is still probing whether FSD is fit for purpose. A recall could be on the table if further findings are damning.

In October 2025, NHTSA also launched an investigation into reports that FSD had caused vehicles to run red lights or veer into wrong lanes.