Tesla Inc. has quietly resolved a lawsuit stemming from a fatal 2023 crash that precipitated a defect investigation into the carmaker’s automated-driving technology.
The collision involved 71-year-old Johna Story, who had stepped out of her vehicle on an Arizona highway to help direct traffic around cars that had already crashed due to blinding sun glare. Moments later, she was struck at high speed by a Tesla Model Y SUV using the company’s so-called Full Self-Driving system.
Story’s death — one of 40,901 on US roads that year — was the first known pedestrian fatality linked to Tesla’s automation technology. The crash prompted a federal investigation by the National Highway Traffic Safety Administration and a lawsuit from Story’s daughter against Tesla and the driver.
Attorney Dustin Birch, who represents Story’s daughter, said in a phone interview that the case recently settled and “my client is happy to put this behind her.” Terms of the settlement weren’t disclosed, and an attorney for Tesla didn’t respond to requests for comment.
Bloomberg News published an investigation last year that examined whether sun glare can compromise Tesla’s camera-based automated-driving system. The report reconstructed the crash in part through videos and photos obtained via public-records requests.
Chief Executive Officer Elon Musk has increasingly bet Tesla’s future on driverless-vehicle technology and robotaxis, with FSD underpinning those ambitions. The automaker has sought approvals around the world for versions of the technology, even as some auto-safety advocates posit that aspects of the system are defective.
After opening an investigation in 2024 into whether FSD poses an unacceptable safety risk, NHTSA escalated the probe this year to what’s known as an engineering analysis. The regulator has raised concerns that Tesla’s technology could fail to detect or warn the driver under degraded visibility conditions, such as sun glare, dust or fog.
In crashes reviewed by NHTSA, Tesla’s system “did not detect common roadway conditions that impaired camera visibility” until immediately before a crash, the regulator said. A review of Tesla’s responses “revealed additional crashes that occurred in similar environments and where the system either did not detect a degraded state, and/or it did not present the driver with an alert with adequate time for the driver to react. In each of these crashes, FSD also lost track of or never detected a lead vehicle in its path.”
Tesla executives said on an earnings conference call in April that the company has changed cameras on older vehicles to address the issues. Tesla said then that it continues to work with NHTSA.
Copyright 2026 Bloomberg.
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