The automaker’s so-called Full Self-Driving Beta system “may allow the vehicle to act unsafe around intersections”, including travelling straight through from a turn lane and proceeding through steady-yellow traffic lights, according to a filing on Thursday. The system’s errors “could increase the risk of a collision if the driver does not intervene”, said the US National Highway Traffic Safety Administration (NHTSA).

The recall affects 362,758 vehicles, including certain Model 3, Model X, Model Y and Model S units manufactured between 2016 and 2023. Tesla is expected to fix the issue through an over-the-air software update by April 15, the NHTSA said.

The agency’s concerns raise new questions about a system that Tesla Chief Executive Officer Elon Musk sees as critical to the company’s long-term prospects. While Musk didn’t address the specifics of the NHTSA’s filing, he tweeted Thursday that the term “recall” was “flat wrong” since the issues can be fixed with a software update.

The company’s automated-driving technology is already under scrutiny from Washington. The NHTSA has been looking into this since 2021 after a dozen collisions with first responders and other vehicles. The agency also opened an investigation last year into complaints of Tesla cars with Autopilot driver assist that suddenly brake at high speeds.

The NHTSA said in a separate statement on Thursday that its investigations of Tesla’s Autopilot are still active.

The shares turned negative after the recall notice, falling less than 1% at 2.06pm in New York.

‘Potential Concerns’

The agency said it first notified Tesla on January 25 that it had identified “potential concerns related to certain operational characteristics of FSD Beta in four specific roadway environments” and requested that the automaker file a recall.

Tesla met with the agency multiple times in the following days. The company did not concur with the agency’s analysis, but decided on February 7 to move forward with the recall “out of an abundance of caution”, according to the NHTSA.

Representatives of Tesla didn’t immediately respond to requests for comment from Bloomberg.

Tesla identified 18 warranty claims between May 2019 and September 2022 that “may be related” to the conditions the NHTSA was concerned about, but told the agency it is not aware of any injuries or deaths related to the defect.

“It’s encouraging that Tesla is not trying to fight this and is working with the NHTSA,” said Missy Cummings, a professor at George Mason University who specialises in autonomous systems and spent a year at the agency. “It’s a good sign that the company is maturing.”