Tesla Reaches Settlement in Full Self-Driving Crash Lawsuit Amid Ongoing Federal Investigations

Tesla has resolved a lawsuit related to a fatal 2023 crash involving one of its vehicles operating with the company’s advanced driver assistance technology, known as Full Self-Driving (FSD).

Bloomberg first reported that the case had been settled, although the financial terms of the agreement were not made public.

The legal action was brought against both Tesla and the driver by the daughter of 71-year-old Johna Story, who was driving a Tesla Model Y. Story was fatally struck while stepping out of her own vehicle to help direct traffic around an earlier accident that had been caused by sun glare when the Tesla hit her.

The U.S. National Highway Traffic Safety Administration (NHTSA) launched an investigation into Tesla’s FSD (Supervised) driver assistance software in 2024 after receiving reports of four crashes that occurred under conditions involving reduced visibility, including the incident that resulted in Story’s death. At the time, the agency said it was examining whether the system could “detect and respond appropriately to reduced roadway visibility conditions,” including sun glare, fog, or airborne dust.

In March 2026, the NHTSA elevated the investigation to an engineering analysis. In its report, the agency stated that “Available incident data raise concerns that Tesla’s degradation detection system, both as originally deployed and later updated, fails to detect and/or warn the driver appropriately under degraded visibility conditions such as glare and airborne obscurants.”

Although the settlement brings the family’s civil lawsuit to a close, the NHTSA’s expanded federal investigation remains ongoing. Depending on the outcome of that investigation, Tesla could face several regulatory actions, including a vehicle recall.

Separately, the federal safety agency opened another investigation into Tesla’s Full Self-Driving software in October 2025 after receiving reports alleging that vehicles using the system had run red lights or crossed into the wrong lane.