Tesla Inc. (Nasdaq: TSLA) is confronting intensifying regulatory scrutiny over its autonomous driving technology just weeks before the electric vehicle maker plans to launch its first commercial robotaxi service in Austin.
The National Highway Traffic Safety Administration has been investigating Tesla’s Full Self-Driving system since October following several fatal crashes, including a November 2023 incident in Arizona where a Tesla using the technology struck and killed a 71-year-old grandmother who was directing traffic around an earlier accident.
Federal safety regulators have contacted Tesla requesting detailed information about how the system handles adverse weather conditions — scenarios that have been linked to several crashes involving the driver assistance technology.
The regulatory pressure comes as Tesla races to meet CEO Elon Musk’s promise to launch a paid robotaxi service in Austin by the end of June. The company plans to start with approximately 10 Model Y vehicles operating without safety drivers in a geographically limited area, marking Tesla’s first attempt at fully autonomous commercial transportation.
Recent reports indicate Tesla may not have sufficient time to conduct adequate safety testing before the June launch, raising questions about the company’s readiness for commercial deployment. Tesla has suspended regular software updates for consumer vehicles as engineers focus entirely on preparing the Austin launch.
Read: Tesla Targets June 12 Austin Robotaxi Launch Amid Safety, Regulatory Concerns
“Elon Musk has bet the entire company on this philosophy that current Tesla vehicles are capable of being a robotaxi,” said Michael Brooks, executive director of the Center for Auto Safety. “We know the FSD system is camera-based, and sun glare can inhibit camera-based operations.”
The regulatory challenges extend globally. China announced this week that it is developing new mandatory safety requirements for driver assistance systems following a fatal accident involving an electric vehicle with autopilot engaged. The proposed standards would specify technical requirements for motion control, driver monitorin, and functional safety.
In Europe, Tesla continues to await regulatory approval for its Full Self-Driving technology, with new rules governing autonomous vehicle maneuvers not expected to take effect until September.
Read: Musk Says He’s Decommissioning Dragon Spacecraft, Calls For Trump’s Impeachment
Tesla’s regulatory hurdles have been compounded by a public feud between Musk and President Donald Trump over government spending that sent the company’s stock tumbling 14% Thursday, erasing about $150 billion in market value. Musk called Trump’s signature spending legislation a “disgusting abomination,” prompting the president to threaten to terminate government contracts with Musk’s companies.
Read: Elon Musk Condemns Trump’s ‘One Big Beautiful Bill’ as Fiscal Disaster
Tesla shares fell 14% on Thursday, losing approximately $150 billion in market value as the feud between the president and Musk escalated.
Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
