Tesla has blamed a driver who claimed his electric car was on 'Autopilot' when he smashed into a home and killed a beloved grandmother. 

Martha Avila, 76, was in the front playroom of her family's home in Katy, Texas, on June 19 when Michael Butler's Tesla veered off a quiet residential road and rammed into the house, her son-in-law, Justin Barbour, said. 

While the family was making dinner the vehicle crashed into the home, made a loud screech and hit Avila, Barbour told ABC 13.

Avila was rushed to a nearby hospital with catastrophic injuries and later died, police said. 

Butler told investigators that his Tesla Model 3 was on 'Autopilot', or an 'automated driving assistance system', when he sped into the house, according to the Harris County Sheriff's office. 

But on Monday afternoon, Ashok Elluswamy, the Vice President of Autopilot at Elon Musk's $1.4 trillion company, suggested Butler was at fault for the deadly crash because he 'manually overrode' the Autopilot feature that night. 

Musk initially took to the platform to dispute a story on the deadly incident, stating 'this makes no sense'. 

Elluswamy then replied: 'Yup. In this case, the driver manually overrode self-driving by pressing the accelerator all the way to 100% of the accelerator pedal in this residential area. 

'They reached a speed of 73 mph during the crash, and had the accelerator pressed even after the crash.' 

An investigation into the fatal crash remains ongoing with the Harris County Sheriff's Department and the National Highway Traffic Safety Administration (NHTSA) probing the case. 

Heart-pounding doorbell footage captured the terrifying moment Butler's car barreled full speed into the home. 

Emergency crews rushed to the scene, where they found a massive hole in the house and debris everywhere. 

Jennifer Barbour, Avila's daughter, told KHOU she was in the backyard when she heard a loud boom.

Meanwhile, her husband, Justin, said he was cooking at the stove just 30 seconds before the tragedy. 

According to the outlet, Barbour frantically found her husband and three children, but after the dust and smoke had settled she discovered her mother had been struck.

'My three kids were at my neighbor's when we went to the hospital to check on my mom,' she said. 'And then they told us they couldn't save her.'

Barbour described the moment she had to inform the children that their Grandma was gone.

'I'm still wearing the same clothes from yesterday.' Barbour said, adding that the family is currently staying in a hotel.

Butler also sustained injuries in the crash and was taken to the hospital in an ambulance. His current condition remains unknown. 

Investigators have stated that Butler showed no signs of intoxication and is cooperating fully with authorities. 

Harris County Sheriff’s Office Sgt Alex Turman, an accident investigator and public information officer, told ABC's Alex Presha that the cause of the crash has not been determined.

'We’re digging into that. That’s a line of investigation for sure,' Turman responded, when asked whether the vehicle’s automated driving features were in use.

Turman added that investigators are working with people familiar with Tesla vehicles and with the driver to determine 'what role the driver’s control over the car played in this crash.'

Despite its name, Tesla’s controversial 'Autopilot' feature is not a fully self-driving system and still requires constant driver supervision.

Critics argue the branding is dangerously misleading, lulling motorists into a false sense of security, because they may assume the car is capable of driving itself.

Avila's family has gone on to set up a GoFundMe page for people to donate money to help the her daughter, son-in-law and grandchildren, who have been left with an uninhabitable home after the crash. 

As of Tuesday afternoon, more than $32,000 had been raised.  

The Daily Mail contacted the Harris County Sheriff's Department, the NHTSA, and Tesla for comment.