Tesla (TSLA.O) is recalling over 2 million vehicles in the U.S. to install new safeguards in its Autopilot advanced driver-assistance system, after a federal safety regulator cited safety concerns.

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The largest-ever Tesla recall appears to cover nearly all vehicles on U.S. roads to better ensure drivers pay attention when using the system. Tesla's recall filing said that Autopilot's software system controls "may not be sufficient to prevent driver misuse" and could increase the risk of a crash.

The National Highway Traffic Safety Administration (NHTSA) has spent over two years investigating whether vehicles produced by the electric automaker led by billionaire Elon Musk adequately ensure drivers pay attention.

Acting NHTSA Administrator Ann Carlson praised Tesla for agreeing to the recall. "One of the things we determined is that drivers are not always paying attention when that system is on," she said at a U.S. House hearing.

Carlson said the agency opened a safety probe in August 2021 when she kept hearing about fatal crashes involving use of Autopilot. "My immediate response was, 'We have to do something about this,'" she said.

Separately, Transport Canada said Tesla will recall 193,000 vehicles to address the Autopilot issue. It was not immediately clear if China will demand a recall.

Tesla shares were flat Wednesday afternoon.

Tesla's Autopilot is intended to enable cars to steer, accelerate and brake automatically within their lane, while enhanced Autopilot can assist in changing lanes on highways but does not make vehicles autonomous.

One component of Autopilot is Autosteer, which maintains a set speed or following distance and works to keep a vehicle in its driving lane.

Tesla said it did not agree with NHTSA's analysis but would deploy an over-the-air software update that will "incorporate additional controls and alerts to those already existing on affected vehicles to further encourage the driver to adhere to their continuous driving responsibility whenever Autosteer is engaged."

U.S. Senators Ed Markey and Richard Blumenthal said the recall "is critically needed to make Tesla’s cars safer, but it is egregiously overdue... We urge NHTSA to continue its investigations to spur necessary recalls, and Tesla to stop misleading drivers and putting the public in great danger."

NHTSA said its investigation into Autopilot will remain open as it monitors Tesla’s remedies.

Tesla did not respond to a question on the extent of the recall worldwide or give more precise details of the new safeguards.

'FORESEEABLE MISUSE'

NHTSA opened its August 2021 probe of Autopilot after identifying more than a dozen crashes in which Tesla vehicles hit stationary emergency vehicles. The probe was upgraded in June 2022. NHTSA said it found Autopilot "can provide inadequate driver engagement and usage controls that can lead to foreseeable misuse." NHTSA reviewed 956 crashes where Autopilot was initially alleged to have been in use and focused on 322 Autopilot-involved crashes.

Bryant Walker Smith, a University of South Carolina law professor, said the software-only fix will be fairly limited. The recall "really seems to put so much responsibility on human drivers instead of a system that facilitates such misuse."

Donald Slavik, an attorney representing multiple people suing Tesla alleging Autopilot defects, said some jurisdictions including California could allow plaintiffs to introduce the NHTSA recall into evidence, as well as other post-accident fixes made by Tesla. At the same time, plaintiffs still must prove the defect involved in the recall caused their particular accident.

"This is one step ... but it’s not a determination in any case," Slavik said.

Separately, since 2016, NHTSA has opened more than three dozen Tesla special crash investigations in cases where driver systems such as Autopilot were suspected of being used, with 23 crash deaths reported to date.

NHTSA said there may be increased crash risks when Autopilot is engaged but drivers do not maintain responsibility and is unprepared to intervene.

Tesla will roll out the update to 2.03 million Model S, X, 3 and Y vehicles in the U.S. dating back to 2012, the agency said.

The update based on vehicle hardware will include increasing prominence of visual alerts, simplifying engagement and disengagement of Autosteer and additional checks upon engaging Autosteer.

Tesla disclosed in October the U.S. Justice Department issued subpoenas related to its Full Self-Driving (FSD) and Autopilot. Reuters reported in October 2022 that Tesla was under criminal investigation.

Tesla in February recalled 362,000 U.S. vehicles to update its FSD Beta software after NHTSA said the vehicles did not adequately adhere to traffic safety laws and could cause crashes.

NHTSA closed an earlier investigation into Autopilot in 2017 without taking action. The National Transportation Safety Board (NTSB) has criticized Tesla for a lack of system safeguards for Autopilot, and NHTSA for a failure to ensure the safety of Autopilot.

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