Tesla Launches Cybercab in Austin as Federal Regulators Open Safety Probe

Tesla put its two-seat Cybercab into service at an invite-only event in downtown Austin, Texas. The futuristic, gold-colored robotaxi features butterfly doors and operates without a steering wheel, mirrors, or brake pedals.

Tesla Launches Steering-Wheel-Free Cybercab in Austin

Riders in Austin can hail the vehicles through the company’s Robotaxi app, adding the new design to the fleet of driverless Model Y SUVs that have carried paying passengers in the city since June 2025. Elon Musk kicked off the service with fanfare, sending dozens of the vehicles onto city streets. Texas has authorized 45 Cybercabs for driverless operation statewide, and the initial deployment included five winners selected through a rider sweepstakes.

Federal Safety Regulators Open Probe Into Compliance

Just a day after the commercial rollout began, federal regulators opened an investigation into whether the steering-wheel-free taxis comply with safety rules. The National Highway Traffic Safety Administration announced it was examining whether Tesla was in full compliance when deploying the vehicles, given the absence of manual controls typically required in automobiles.

The agency stated it will conduct an audit to examine the process and technical data Tesla used to self-certify that the Cybercabs meet federal standards. Automakers in the U.S. generally self-certify new vehicles when introducing them to public roads, and regulatory investigations are not automatic. Rival robotaxi service Zoox faced a similar probe three years ago after self-certifying its own steering-wheel-free cabs, eventually receiving approval after a formal review. Tesla did not respond to requests for comment regarding the federal probe.

Production Constraints and Future Plans

While the rollout in Austin marks a milestone for Musk’s vision of a cheap, driverless taxi service, questions remain regarding volume manufacturing. Tesla began producing the vehicle earlier this year, and its factory line at Gigafactory Texas is built to make more than 125,000 vehicles annually. However, Tesla removed the Cybercab from the list of products expected to reach volume production in 2026 during its July update, citing battery pack capacity expansion as the main limiting factor.

A gold-colored Tesla Cybercab arrives for an event in downtown Austin, Texas, U.S., September 3, 2026. Picture taken with a — Photo: reuters.com

The current deployment of 45 registered vehicles represents a small fraction of installed factory capacity. Musk plans to integrate the Cybercabs into the company’s broader robotaxi network, which has operated in Austin for more than a year and expanded to five other cities in Texas and Florida using conventional Model Y vehicles equipped with standard manual controls.

Market Reaction and Existing Safety Investigations

Financial markets reacted sharply to the dual developments of the launch and the regulatory probe. Tesla shares rose 5.7% ahead of the event to close at about $376, but fell nearly 6% to $354.08 following the announcement of the federal investigation, reversing the previous day’s gains.

A Tesla Cybercab moves through downtown Austin, Texas, Thursday, Sept. 3, 2026. (AP Photo/Eric Gay) — Photo: AP News

The Cybercab probe compounds existing federal scrutiny facing Tesla’s self-driving technology. The automaker is currently the subject of three separate federal investigations examining:

The role of self-driving software in crashes during low-visibility conditions such as fog and sun glare, including a fatal pedestrian incident.
Dozens of incidents where Teslas using partial self-driving software ran red lights or drove on the wrong side of the road, resulting in collisions and injuries.
Failures by Tesla to promptly report crashes as required by regulatory mandates.

Industry experts note that Tesla has historically tested regulatory limits, and experts suggest the company’s approach could put autonomous vehicle oversight to the test as it attempts to scale the service.