Vehicle and battery recalls, safety defects, cybersecurity issues and legal/regulatory actions against Tesla’s Autopilot and FSD marketing

Tesla continues to confront mounting challenges related to vehicle and battery recalls, safety defects, cybersecurity vulnerabilities, and escalating legal and regulatory pressures targeting its Autopilot and Full Self-Driving (FSD) marketing practices. These intertwined issues increasingly threaten Tesla’s credibility and operational ambitions, particularly as it pushes forward with its autonomous mobility vision.

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Broadening Hardware and Software Recalls Spotlight Persistent Safety Defects

In 2026, Tesla’s recall footprint has expanded significantly, with over 450,000 vehicles globally and thousands of Powerwall energy storage units affected by safety-related defects. Key recall and defect issues include:

• Power Steering and Suspension Failures:
  Over 375,000 Model 3 and Model Y vehicles continue to experience sudden power steering assist loss, a defect linked to multiple crashes despite Tesla’s incremental fixes. Approximately 60,000 Model Y (2022) units suffer from suspension control arm bolt fatigue, with inconsistent repair outcomes reported.

• Driver-Side Window Software Defect in Australia:
  Roughly 7,300 Tesla vehicles in Australia were recalled due to a malfunction in the driver's-side window automatic anti-pinch system, raising safety concerns over inconsistent quality control.

• Door Handle Failures Prompt Global Regulatory Pushback:
  Tesla’s flush electronic door handles have been implicated in fatal incidents, leading to expanded recalls and a ban on retractable door handles in China. This ban forces costly design changes and complicates Tesla’s regulatory compliance in one of its largest markets. In the U.S., lawmakers have pushed for mandated mechanical override options on electronic door handles following wrongful death lawsuits.

• Powerwall Battery Recall and Fire Risks:
  Tesla initiated a nationwide recall of thousands of its home Powerwall battery units due to thermal runaway fire hazards, a serious safety concern undermining Tesla’s residential energy reputation even as Powerwall deployments grow in Australia and elsewhere.

• Ongoing Chinese Regulatory Scrutiny:
  Chinese authorities have launched investigations into Tesla’s Battery Management System (BMS), signaling potential for further recalls or penalties. Tesla’s aggressive efforts to shorten China delivery times to 1–3 weeks and extend financing options aim to sustain sales amid market softness but may exacerbate regulatory risks.

• Incremental Progress on Persistent Defects:
  Tesla appears close to resolving a long-standing matrix headlight malfunction, indicating some quality improvement amid a backlog of significant defects.

These widespread recalls and defects have eroded consumer confidence and intensified regulatory oversight, underscoring ongoing challenges in Tesla’s hardware quality and software reliability.

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Cybersecurity Vulnerabilities Compound Risk Profile

Tesla’s integration of autonomous driving technologies with innovations such as wireless charging and vehicle-to-grid (V2G) has introduced a new set of cybersecurity vulnerabilities:

• Independent research teams have uncovered serious wireless attack vectors in Tesla Model 3 and Cybertruck vehicles. These vulnerabilities exploit inductive charging and V2G communication protocols to potentially disrupt vehicle controls, track vehicles remotely, or intercept sensitive data.

• Although Tesla has issued over-the-air patches to address some of these flaws, cybersecurity experts and regulators emphasize the urgent need for independent verification and enhanced security protocols before Tesla can confidently scale robotaxi operations.

• Tesla’s Full Self-Driving (FSD) subscription model grants the company broad unilateral authority to modify pricing, features, or service access without prior notice, raising concerns about governance transparency and operational safety amidst unresolved security risks.

This cybersecurity dimension adds complexity to Tesla’s autonomous ambitions, where safety must extend beyond hardware to include robust digital protections.

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Regulatory Investigations, Legal Battles, and Marketing Controversies Surrounding Autopilot and FSD

Tesla’s Autopilot and FSD marketing practices have attracted intensified regulatory scrutiny, lawsuits, and adverse rulings, highlighting concerns over safety claims and crash liability:

• A federal court ruling condemned Tesla’s FSD advertising claims as “unambiguously false,” a landmark decision that has triggered ongoing lawsuits and complicated regulatory approvals in key markets.

• Tesla has responded with legal actions, such as suing the California Department of Motor Vehicles (DMV) to overturn restrictions on Autopilot and FSD marketing language.

• California regulators initially moved to suspend Tesla sales due to deceptive marketing but ultimately decided not to suspend sales after Tesla dropped misleading Autopilot terms, reflecting a regulatory tug-of-war.

• Industry critics, including investment expert Ross Gerber, have publicly condemned Tesla’s so-called “Mad Max” FSD mode as “basically unsafe,” especially following a historic $243 million liability verdict related to an Autopilot-involved fatal crash.

• Tesla faces a federal investigation into its Full Self-Driving system’s role in crashes and injury claims, intensifying legal risks and public scrutiny.

• Internally, Tesla’s governance has suffered as Elon Musk has dismissed key personnel responsible for autonomous vehicle safety and regulatory compliance, raising investor fears about diminished oversight and risk management.

Collectively, these legal and regulatory pressures underscore the fragile position Tesla occupies between ambitious autonomous innovation and the imperative of truthful, safety-conscious marketing.

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Market and Governance Implications

Tesla’s safety and regulatory challenges are compounded by market headwinds and governance concerns:

• Tesla’s sales declined 11.4% in California in 2025, a key market where regulatory scrutiny is highest and competitor presence, notably from BYD and Waymo, intensifies.

• Tesla shares slid 2.9% recently amid renewed concerns over robotaxi safety and commercialization delays.

• Shareholders have demanded greater transparency and risk mitigation strategies focused on robotaxi safety during earnings calls, signaling growing investor impatience with ongoing safety controversies.

• Elon Musk’s leadership approach, including the firing of autonomous safety experts, has sparked criticism regarding Tesla’s commitment to rigorous engineering discipline and regulatory compliance.

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Conclusion

Tesla’s expanding recalls and safety defects, coupled with cybersecurity vulnerabilities and escalating legal and regulatory battles over Autopilot and Full Self-Driving marketing claims, present formidable obstacles. These challenges threaten Tesla’s ability to safely scale its autonomous vehicle program and sustain consumer trust.

“Tesla’s unfolding crisis demonstrates that innovation without rigorous hardware safety standards and governance is unsustainable. The company must urgently close these gaps or face long-term damage to its competitive position and consumer trust.”
— Dr. Elaine Chen, Vehicle Safety Expert

Navigating this complex landscape requires Tesla to reinforce engineering quality, enhance cybersecurity safeguards, and adopt transparent, responsible marketing practices. How Tesla addresses these converging risks will be pivotal to the future of its autonomous driving ambitions and broader mobility ecosystem.