The National Highway Traffic Safety Administration (NHTSA) upgraded its Tesla Full Self-Driving (FSD) investigation to an engineering analysis.

The probe now encompasses 3.2 million vehicles.

This procedural escalation is a mandatory step before the agency can officially demand a vehicle recall.

Investigators are focusing on whether the camera-only system fails in low-visibility conditions such as glare or dust.

The agency has identified nine incidents potentially linked to these visibility failures.

One of these reported incidents resulted in a fatality.

NHTSA is also evaluating if the system provides adequate driver alerts when camera performance degrades.

The current investigation follows a preliminary evaluation launched in October 2024.

A large-scale recall would challenge the reliability of the Tesla Vision autonomous driving strategy.

Such an outcome could significantly impact investor confidence and the company's financial outlook.