Tesla has said it is recalling 362,000 electric cars in the US for a beta version of its Full Self-Driving (FSD) software after a US regulator said the driver assistance system did not comply with traffic safety laws and could cause accidents, reports Reuters.

The National Highway Traffic Safety Administration (NHTSA) said Tesla’s software allows the car to “exceed speed limits or travel through intersections in an unlawful or unpredictable manner increases the risk of a crash.”

Tesla will release a free over-the-air (OTA) software update, and the electric car maker said it is not aware of any injuries or deaths that may be related to the recall. At the same time, Tesla noted that they have 18 warranty claims.

Tesla shares have already fallen 1.6% to $210.76.

The recall affects 2016-2023 Model S and Model X, 2017-2023 Model 3 and 2020-2023 Model Y electric vehicles equipped with or awaiting the installation of FSD Beta software.

NHTSA asked Tesla to recall the cars, but the company said that despite the recall, it disagreed with the regulator’s conclusion. The move is a rare intervention by a federal regulator into a real-world testing program that the company believes is critical to developing self-driving cars. FSD Beta is used by hundreds of thousands of Tesla customers.

The move away from Tesla’s automated driving comes about two weeks before the company’s March 1 investor day, when CEO Elon Musk is expected to promote the electric carmaker’s artificial intelligence capabilities and plans to expand its lineup of cars.

NHTSA has an ongoing investigation it opened in 2021 into 830,000 Tesla vehicles with driver assistance system Autopilot over a string of crashes with parked emergency vehicles. NHTSA is reviewing whether Tesla vehicles adequately ensure drivers are paying attention. NHTSA said on Thursday despite the FSD recall its “investigation into Tesla’s Autopilot and associated vehicle systems remains open and active.”

Tesla said in “certain rare circumstances … the feature could potentially infringe upon local traffic laws or customs while executing certain driving maneuvers”.

Possible situations where the problem could occur include driving through or turning through certain intersections during a yellow light, and changing from certain turn-only lanes to continue straight ahead, NHTSA said.

The regulator also stated that “the system may respond insufficiently to changes in posted speed limits or not adequately account for the driver’s adjustment of the vehicle’s speed to exceed posted speed limits.”

Last year, Tesla recalled nearly 54,000 electric vehicles in the U.S. with FSD Beta software that could allow some models to fail to stop completely at stop signs and at certain intersections, posing a safety risk, NHTSA said.

Tesla and NHTSA say FSD’s advanced driving features do not make cars autonomous and require drivers to pay attention.