The National Highway Traffic Safety Administration has formally closed its investigation into power-steering failures in Tesla’s Model 3 and Model Y, ending a nearly three-year probe without requiring further action. The decision, announced Saturday and reported by Reuters, removes one of the longest-standing regulatory clouds over the company, whose shares have climbed about 30% this year partly on the expectation that its legal and safety risks were narrowing.
The investigation, designated EA24001, covered roughly 376,241 vehicles from the 2023 model year. The agency opened a preliminary evaluation in July 2023 after owners reported sudden increases in steering effort, apparent loss of power-steering assistance and warnings on the dashboard; some drivers found that once the car slowed to a stop on its backup system, electronic assistance was no longer available, leaving them with manual steering only. The probe was upgraded to a full engineering analysis in February 2024 as the number of complaints grew past 2,000.
Tesla addressed the problem with software. The company began pushing an over-the-air update, version 2023.38.4, in October 2023, designed to prevent the overvoltage condition that could overstress the steering motor drive components. The software later formed the basis of a formal recall, filed with NHTSA in February 2025 under notice 25V092, covering the affected vehicles; Tesla said at the time that it would replace physical steering components on cars where the software fix was insufficient.
The closure came after regulators reviewed owner complaints alongside Tesla’s field data and found that the remedy had been effective. The agency’s notice concluded that the recall, a software update plus component replacement where necessary, sufficiently mitigated the safety risk across the affected vehicles. NHTSA did not order any additional action, a clean ending for a case that had run from complaint spike to engineering review to fleet-wide remedy.
The outcome is the third recent win for Tesla on the regulatory front. Earlier this year, the agency closed a long-running investigation into steering wheels detaching from Model Y vehicles, and it also ended a probe of the Actually Smart Summon feature, finding the incidents tied to the system were rare and largely minor. The steering case was the largest and longest of the three, and its closure signals that the pattern of recent Tesla investigations, intense scrutiny followed by quiet resolution, is holding.”
The closure does not leave Tesla clear of all regulatory attention. The agency still has active inquiries into areas including the visibility of Tesla’s driver-assistance features, and the company’s use of the term Full Self-Driving has been a recurring subject of scrutiny. The steering case, however, was the kind of issue that most worried investors: a safety defect in a mass-market product that could have required an expensive physical remedy across hundreds of thousands of vehicles.
The resolution also highlights how Tesla’s over-the-air approach changes the shape of recalls. A conventional recall at this scale would have meant hundreds of thousands of workshop visits over many months; the software remedy reached most cars in the background, with updates delivered while vehicles were parked. Regulators have grown accustomed to the pattern, and the closing notice reflects the evidence it produced: complaints fell sharply after the fix was deployed, the kind of data that lets an investigation end cleanly.
Investors have taken the news in stride, with the stock holding its recent gains in trading after the announcement. The probe’s closure removes a known risk rather than creating a new one, and analysts said the more important signal is what it says about the broader relationship between Tesla and its regulators: cases that were once existential threats have become manageable, and the company has developed a playbook for resolving them.
For Tesla owners, the practical message is unchanged. Anyone with a 2023 Model 3 or Model Y who has not received the software update should contact the company, and vehicles that needed hardware replacement should already have been serviced under the recall. The government’s file on the steering issue is now closed; for the company, the harder work of keeping the remaining probes from turning into the next headline is only beginning.
The case also sets a precedent for how regulators treat software-based remedies in the industry at large. As more automakers adopt over-the-air updates, the question of when a fix counts as a recall, and when it counts as an ordinary improvement, has become a defining regulatory issue. NHTSA’s handling of the Tesla case, accepting a software remedy at scale and closing the file once the data showed the fix worked, gives the industry a reference point. Automakers will cite it in future discussions, and regulators will be asked to explain any case in which they treat a comparable remedy differently.
