Tesla's FSD robotaxi plans face safety investigations and market doubts

Tesla’s Full Self‑Driving (FSD) system is under federal scrutiny after a fatal crash in Texas that killed a 76‑year‑old woman. The driver reported Autopilot was engaged, but Tesla’s AI VP said the driver manually overrode the system. The National Highway Traffic Safety Administration and the National Transportation Safety Board have opened investigations, and Tesla has settled a lawsuit related to a 2023 crash involving FSD. A separate NHTSA probe is examining whether FSD can safely handle reduced visibility conditions such as glare, fog or dust.

At the same time, the company’s upcoming Cybercab – a two‑seat vehicle intended for robotaxi use – faces market skepticism. Analysts question consumer demand for a two‑seat car in the U.S. and Europe, where larger vehicles remain popular. Private owners would also need to manage insurance, maintenance, cleaning and software updates, complicating immediate deployment. The mixed regulatory pressure and uncertain commercial appeal highlight the challenges Tesla faces in expanding its robotaxi business.