Tesla has reached a settlement regarding a lawsuit related to a deadly crash in 2023 involving a vehicle utilizing the firm’s sophisticated driver assistance technology called Full Self-Driving.

Bloomberg was the first to inform about the settlement. The specifics were not revealed.

The lawsuit was initiated against Tesla and the driver by the child of Johna Story, a 71-year-old woman struck by a Tesla Model Y. Story was hit after she exited her own vehicle to manage traffic around a previous accident caused by sun glare.

In 2024, the National Highway Traffic Safety Administration (NHTSA) commenced an investigation into Tesla’s FSD (Supervised) automated driving software following four reported incidents in low visibility conditions — one of which involved Story. The NHTSA stated that it was examining the driver assistance technology to determine if it could “identify and react suitably to decreased roadway visibility conditions,” such as “sun glare, fog, or airborne dust.” 

That investigation was escalated in March 2026 to an engineering analysis. In that documentation, the agency noted that “Available incident data raise concerns that Tesla’s degradation detection system, both in its original implementation and subsequent updates, fails to identify and/or alert the driver correctly under compromised visibility conditions such as glare and airborne obscurants.”

While the settlement concludes the family’s lawsuit, the NHTSA investigation has not been wrapped up yet. Potential outcomes for Tesla in the federal inquiry include a recall.

The federal agency also initiated an investigation into FSD in October 2025 after receiving reports that the software led vehicles to run red lights or veer into incorrect lanes.