The National Highway Traffic Safety Administration (NHTSA) has closed its investigation into 695,000 Tesla Model Y and Model 3 vehicles following software updates that addressed unexpected deceleration issues. The agency determined that the braking anomalies, while concerning to drivers, did not result in any crashes or significant safety risks. Separately, General Motors recalled 14,540 Cadillac Vistiq SUVs due to a defect in the power-folding third-row seat that poses an entrapment risk.

NHTSA Closes Tesla Investigation

NHTSA closed the probe after Tesla released software updates that reduced the number of reported incidents to three since the start of the year, down from 45 in 2024. Owners had previously reported a 10-20 mph speed reduction at highway speeds over a 1-3 second period. The agency noted that the conditions did not alter the vehicle's lateral positioning or cause significant loss of distance between the subject and following vehicle to lead to a collision.

This marks the third recent investigation into Tesla that NHTSA has closed. The agency previously closed a power steering probe after the issue was addressed in a recall and ended an investigation into the automaker's Actually Smart Summon feature affecting 2.5 million vehicles.

GM Recalls Cadillac Vistiq Vehicles

General Motors recalled 14,540 units of the 2026-2027 Cadillac Vistiq because the third-row power seatback may fail to reverse when the power fold feature is activated. This failure could trap occupants in the third row. Dealers will disable the folding feature until parts are available, after which the seat module will be replaced free of charge.

GM EV Sales Performance

The recall announcement coincided with GM's report of a nearly 41% year-over-year decline in electric vehicle sales in the second quarter of 2026. The company sold 27,395 EVs during the period, with specific models showing mixed performance.

The sales data reflects an ongoing EV rollback at the automaker, as it adjusts its strategy in response to market dynamics.

Tesla Inc. CEO Elon Musk stated that the initial production ramp for its Optimus humanoid robot will be extremely slow because the company is building an entirely new manufacturing system. Musk clarified on social media platform X that the process is not comparable to making a car, countering speculation that Tesla was ahead of schedule. The company has converted production lines at its Fremont factory, previously used for Model S and Model X vehicles, to support the assembly of Gen 3 Optimus robots. Pilot production is expected to begin this summer at Fremont, while a much larger factory is under construction at Giga Texas. High-volume production is not anticipated until around summer 2027, with Tesla targeting a long-term capacity of 10 million robots annually.

Manufacturing Complexity and Design

Tesla VP of Vehicle Engineering Lars Moravy detailed the installation of the first production line, highlighting its modular design tailored for the robot's smaller size. The bring-up process is expected to be quick due to the robot's dimensions, though the production setup includes 40 lines to accommodate numerous actuators and intricate limb and torso designs. Musk noted that the early phase will focus on getting the assembly process right rather than chasing high volume, citing the robot's complexity with roughly 10,000 unique parts. Additionally, Tesla vehicles can now drive themselves from the end of the line to the logistics yard using a system termed "Full-Self Hearing," which utilizes in-built microphones to detect noises and cracks.

Market Dynamics and Forecasts

The shift to robotics comes as China strengthens its lead in the global humanoid robot market. China shipped approximately 90% of the world's units last year, and Morgan Stanley has doubled its 2026 forecast for Chinese shipments to roughly 50,000 units. The Chinese government supports this sector through a Rmb1 trillion fund for "new productive forces" and mandates for state-owned enterprises to adopt AI-powered robots.

Competitive Landscape

Chinese manufacturers like Unitree are leveraging supply chains to produce cost-effective hardware, with the G1 robot priced at $16,000 compared to Tesla's $20,000 target. The G1 is already deployed at major automotive manufacturers including BYD, Geely, and NIO. Tesla is advancing its technology with the Optimus Gen 3, featuring 22 degrees of freedom in the hands, but prediction market Polymarket assigns only a 14% probability to a consumer release this year.