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U.S. investigates 2.9 million Teslas over Full Self-Driving traffic violations

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The U.S. National Highway Traffic Safety Administration (NHTSA) has launched an investigation into 2.88 million Tesla vehicles equipped with the company’s Full Self-Driving (FSD) software after receiving more than 50 reports of traffic violations and crashes linked to the system.

The agency said the FSD feature — which requires driver attention and intervention — has in some cases “induced vehicle behavior that violated traffic safety laws,” including driving through red lights and making illegal lane changes. So far, 58 incidents have been reported, 14 resulting in crashes and 23 injuries, according to NHTSA.

In at least six cases, Teslas running FSD reportedly entered intersections against red signals, leading to collisions, four of which caused injuries. The regulator said it is also examining FSD’s behavior at railroad crossings following concerns raised by U.S. lawmakers over near-miss incidents.

The probe marks a preliminary evaluation, the first stage before a potential vehicle recall if safety risks are confirmed. Tesla shares slipped 2.1% following news of the investigation, first reported by Reuters.

Tesla recently issued a software update for FSD, though the company has not publicly commented on the probe. The system has been under continuous federal scrutiny amid concerns that its branding and performance blur the line between driver assistance and full automation.

Experts say the U.S. action may pressure other regulators to examine the growing use of semi-autonomous technologies in vehicles worldwide.

Tesla’s cheaper Model Y faces stiff competition in crowded European EV market

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Tesla’s new lower-cost Model Y and Model 3 may struggle to gain traction in Europe, where affordable electric vehicles from Chinese and European automakers already dominate. The newly launched $39,990 Model Y Standard and $36,990 Model 3 enter a segment crowded with more than a dozen models priced below $30,000.

Analysts say the competition could blunt Tesla’s recovery in a region where its market share has halved to around 1.5% since 2023. “The competition in this market is fierce,” said Sam Fiorani of AutoForecast Solutions. Budget EVs such as the BYD Dolphin, Dacia Spring, and Citroën e-C3 are undercutting Tesla’s new releases by thousands of euros, while Volkswagen’s ID.Polo will join the field next year at under €25,000.

Tesla’s European sales drop has been fueled by an aging product lineup and consumer backlash against CEO Elon Musk’s politics. The company hopes the cheaper models will revive demand after its first global sales decline in 2024, with deliveries projected to fall another 10% this year.

Despite interior updates to the Model Y, analysts argue the price cut doesn’t go far enough. “It isn’t going to break the market open in a way that a €30,000 vehicle would,” said Matthias Schmidt of Schmidt Automotive.

With over 25 new EVs set to hit European showrooms next year, Tesla faces its toughest challenge yet in keeping its once-dominant position in the region’s fast-evolving EV market.

Tesla launches “affordable” Model Y and 3, but buyers call prices too high

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Tesla has unveiled lower-cost versions of its Model Y SUV and Model 3 sedan, but their starting prices of $39,990 and $36,990 have left some customers and analysts questioning how “affordable” they truly are. CEO Elon Musk had previously suggested a sub-$30,000 model was key to attracting mass-market buyers.

The move comes as Tesla faces declining sales, growing competition from Chinese and European automakers, and the loss of the $7,500 U.S. EV tax credit. The new “Standard” trims cut luxury features such as heated rear seats and automated steering, though both still offer over 300 miles (480 km) of driving range.

Despite the announcement, Tesla shares fell 4.5%, with analysts saying the $5,000 price cut from premium trims is unlikely to drive major new demand. “It’s basically a pricing lever, not a product catalyst,” said Shay Boloor of Futurum Equities.

Musk canceled a separate $25,000 EV project last year, opting instead for cheaper versions of existing models — a move critics say could cannibalize Tesla’s lineup rather than expand its market.

In the U.S., Tesla now faces fresh competition from Chevrolet’s Equinox, Hyundai’s Ioniq 5, and Kia’s EV4, all targeting the under-$30,000 range. In Europe, Musk’s politics have also eroded loyalty amid rising low-cost alternatives.

Deliveries for the new models are set to begin between December 2025 and January 2026, as Tesla bets affordability — even at a premium — can revive its flagging momentum.