NewsStocksNHTSA Opens Probe Into Tesla's Steering-Wheel-Free Cybercabs a Day After Austin Launch

NHTSA Opens Probe Into Tesla's Steering-Wheel-Free Cybercabs a Day After Austin Launch

Author: Fortune Crypto·

Key Takeaways

  • NHTSA is auditing Tesla's self-certification process for the Cybercab, which lacks steering wheels, mirrors, and brake pedals, one day after the service launched in Austin.
  • Tesla stock dropped nearly 6% to $354.08, erasing the gains made on the Cybercab launch day.
  • The audit's outcome could shape the Cybercab's fate, the pace of Tesla's planned multi-city robotaxi expansion, and the regulatory path for vehicles without manual controls nationwide.
  • Zoox faced a similar probe three years ago for its steering-wheel-free cabs and won approval only after a formal review, indicating the process may take time.
  • Tesla is already under multiple federal investigations into its self-driving software, including crashes in low-visibility conditions that killed a pedestrian and failures to promptly report accidents.
NHTSA Opens Probe Into Tesla's Steering-Wheel-Free Cybercabs a Day After Austin Launch

Federal regulators have opened an investigation into whether Tesla's new steering-wheel-free taxis comply with safety rules, one day after the company began offering rides in the vehicles.

The National Highway Traffic Safety Administration (NHTSA) said it is examining whether Tesla was in full compliance with federal rules when it deployed the so-called Cybercabs in Austin, Texas. The two-seat cars lack the steering wheels, mirrors, and brake pedals typically required in vehicles.

Tesla CEO Elon Musk launched the Cybercab service in Austin on Thursday with fanfare, sending dozens of the futuristic taxis onto city streets and hosting a launch event for invited guests.

Tesla stock fell nearly 6% to $354.08 on Friday, erasing all of its gains from the previous day's launch excitement. Tesla did not respond to a request for comment.

Ahead of the launch, Tesla had said it relied on a self-certification process to ensure the Cybercabs complied with federal standards. The agency is now examining whether the taxis do in fact meet those standards. In its filing on the probe, NHTSA said it would conduct an audit to "examine the process and technical data" Tesla used in the certification.

Thursday's Austin launch kicked off what Musk describes as a national rollout of a low-cost, driverless taxi service that he says will transform how people travel. Musk plans to integrate the Cybercabs, which lack manual controls that passengers could use to take over in an emergency, into the company's existing cab service, which until now has used only conventional Tesla vehicles. That robotaxi network has operated in Austin for more than a year and has also begun offering rides in five other cities in Texas and Florida. The outcome of NHTSA's audit could therefore shape not just the Cybercab's fate in Austin but the pace of Tesla's planned expansion to other cities, and more broadly the regulatory path for driverless vehicles without manual controls across the US.

Automakers generally self-certify when introducing new vehicles on public roads, but a regulatory audit or investigation is not automatic. Regulators investigate only certifications they believe might violate federal rules. Unlike most new models, the Cybercab does not merely feature minor tweaks but significant changes that present new safety issues.

Rival taxi service Zoox faced a similar probe three years ago after self-certifying its own steering-wheel-free cabs. Regulators eventually granted approval, but only after a formal review — a precedent suggesting a formal NHTSA review of the Cybercab could take time even if it ultimately ends in approval.

Tesla is already facing several federal investigations into the safety of its self-driving software. One probe is examining the software's role in several Tesla crashes that occurred in fog, sun glare, and other low-visibility conditions, including one incident in which a pedestrian was killed. Another is investigating dozens of incidents in which Teslas using partial self-driving software ran red lights or drove on the wrong side of the road, sometimes crashing into other vehicles and causing injuries. A third is examining why Tesla apparently violated regulatory requirements by failing to report crashes promptly. That existing scrutiny adds to the stakes of the new audit, as regulators weigh whether Tesla's self-certification for a vehicle without any manual controls was sound.

This story was originally featured on Fortune.com.