Tesla Probed By Federal Traffic Regulator Over In-Vehicle Gaming: What You Need to Know

Tesla Inc TSLA is caught in the crossfire of regulators yet again.

What Happened: A formal safety probe into 580,000 Tesla Models 3, X, S and Y sold since 2017 has been initiated by the National Highway Traffic Safety Administration (NHTSA), Reuters reported.

The probe is related to the vehicles' ability to run games on the infotainment systems, with the regulator opining the functionality called "Passenger Play" may distract drivers, thereby increasing the risk of a crash.

The NHTSA said the functionality that allows Tesla drivers to play video games on the center touchscreen while driving was previously available only when the vehicles were parked.

The gaming feature was reported by the New York Times earlier this month. The report stated Tesla added the games in an over-the-air software update sent to cars this summer.

Related Link: EV Sales Are On The Rise, But Tesla's Global Market Share Is Shrinking: Analyst

The NHTSA said it will evaluate aspects of the feature, including the frequency and use scenarios of "Passenger Play."

Why It's Important: Tesla is already under the NHTSA scanner, with the agency initiating a safety investigation into 765,000 Tesla vehicles over its Autopilot driver assistance system in August.

Tesla also faced a backlash in China at the start of 2021 after a customer reported issues with the brakes.

Such quality and safety issues do not bode well as competition intensifies in the electric vehicle industry, with the mushrooming of pureplay EV startups and transitioning of legacy automakers into EV manufacturing.

TSLA Price Action: Tesla stock was up 4.24% at $978.32 Wednesday morning at publication.

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Photo: Courtesy Tesla Inc.