U.S. closes probe into 695,000 Tesla vehicles over unexpected braking

• Incident reports fell dramatically from 300 at investigation opening to 45 in 2024, 19 in 2025, and only 3 since the start of 2026 after Tesla released software updates
• NHTSA determined the unexpected deceleration did not alter vehicles' lane positioning or cause significant distance loss that would lead to collisions
• A separate expanded investigation remains active covering 376,241 Model 3 and Model Y vehicles over loss of steering control issues

Summary

The U.S. National Highway Traffic Safety Administration (NHTSA) closed its investigation into approximately 695,000 Tesla vehicles on Thursday, citing significantly reduced safety concerns related to unexpected braking issues. The preliminary evaluation, launched in 2022, covered Model 3 and Model Y vehicles.

Key Developments:

Tesla released software updates in early 2022 specifically designed to address the unexpected deceleration problem. These updates proved highly effective, with incident reports dropping dramatically from 300 at the investigation's opening to 45 in 2024, 19 in 2025, and only three since early 2026.

NHTSA determined the issue posed a "low demonstrated hazard" to drivers, noting that the reported conditions did not affect vehicles' lateral positioning within lanes or cause significant distance reduction with following vehicles that could lead to collisions.

Ongoing Concerns:

Despite closing this probe, NHTSA last week opened a separate expanded investigation involving an estimated 376,241 Model 3 and Model Y vehicles concerning loss of steering control issues.

Market Implications:

The closure represents positive news for Tesla, demonstrating the effectiveness of its over-the-air software update capabilities in resolving safety concerns. The dramatic 99% reduction in incidents validates Tesla's proactive approach to addressing regulatory issues. However, the concurrent steering control investigation suggests continued regulatory scrutiny of Tesla's vehicle safety systems. This development may provide modest support for Tesla's stock by removing regulatory uncertainty around the braking issue, though investor attention will likely shift to the ongoing steering investigation and its potential implications.