Tesla’s (TSLA) shares dropped more than 1% early Tuesday despite the U.S. auto regulator’s decision to shut down its steering wheel investigation into 120,089 Model Y vehicles with model year 2023. The move came weeks after the watchdog also closed its probe into Tesla’s Actually Smart Summon vehicle feature.
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The U.S. National Highway Traffic Safety Administration (NHTSA) on Tuesday said it decided to wrap up the investigation as it found no new cases of the steering wheel issue that triggered the evaluation in early 2023.
The U.S. watchdog commenced the investigation following reports that the steering wheel of the vehicles could come off the steering column due to a missing key retaining bolt. Tesla had responded to the problem by removing and reinstalling the steering wheel in affected vehicles.
Why TSLA Stock Is Down
However, investors are not upbeat about the update from NHTSA, as Tesla’s Full-Self-Driving (FSD) system remains under the regulator’s microscope.
The U.S. regulator has been investigating Tesla vehicles since 2024 and launched a probe into 2.88 million units in October 2025 following reports of traffic violations. NHTSA escalated the investigation last month over concerns about the FSD system’s performance in poor weather conditions.
In addition, Tesla shares have declined more than 6% over the past five days after CEO Elon Musk admitted that FSD hardware installed in millions of Tesla vehicles between 2019 and 2023 cannot achieve unsupervised autonomous driving.
However, the automaker is betting on increased spending to expand its robotics and robotaxi business — areas being positioned as new key revenue drivers for Tesla.
Is Tesla a Good Stock to Buy?
On Wall Street, analysts continue to tip Tesla’s shares as Hold based on their consensus rating. This is based on 13 Buys, 14 Holds, and five Sells assigned by 32 analysts over the past three months.
Moreover, the average TSLA price target of $405.62 suggests a modest 7% upside.
