Tesla kills Autopilot as regulatory pressure mounts

Tesla has officially discontinued its Autopilot advanced driver-assistance system (ADAS), which was first introduced in 2014. The decision comes as regulatory pressure intensifies across the autonomous vehicle sector in the United States. The National Transportation Safety Board (NTSB) has opened an investigation into Waymo regarding robotaxis “illegally passing stopped school buses” in at least two states. Meanwhile, Tesla itself is facing a 30-day suspension of manufacturing and dealer licenses in California. This potential suspension follows a ruling that the company engaged in “deceptive marketing by overstating the capabilities of Autopilot and FSD.”

To address these challenges and shift its business model, Tesla recently stopped charging a one-time fee of $8,000 for its Full Self-Driving (FSD) software, moving users to a monthly subscription model. Additionally, according to Elon Musk, Tesla aims to restart work on the Dojo3 AI chip, which will be dedicated to “space-based AI compute.” In other testing, a Tesla Model S recently completed a 3,081-mile transcontinental “Cannonball Run” route using FSD.

The broader mobility and autonomous technology sectors also saw significant funding activity:

• Zipline: The autonomous drone-delivery startup, which began operations in Rwanda, raised $600 million in new funding, reaching a valuation of $7.6 billion. The company plans to expand its P2 drone platform, launched in 2025, to Houston and Phoenix, with further expansion planned for at least four more U.S. states in 2026.
• Ethernovia: The San Jose, California-based autonomous vehicle systems startup raised $90 million in a Series B funding round.
• Terralayr: The German grid-scale battery storage company raised €192 million in a new funding round.
• Serve Robotics: The sidewalk delivery robot company acquired Diligent Robotics in a transaction valuing the common stock at $29 million.
• ABZ Innovation: The Europe-based agricultural and industrial drone maker raised $8.2 million in funding.
• TrueCar: Founder Scott Painter reacquired the automotive marketplace in a $227 million deal.

In other industry developments, Chinese automaker Geely Holding Group announced its five-year blueprint, aiming for its Cao Cao Mobility unit to operate a fleet of 100,000 robotaxis across major cities in China by 2030. Meanwhile, Austin Russell, the founder of “bankrupt lidar company” Luminar, agreed to accept an electronic subpoena for phone records related to the company’s ongoing bankruptcy proceedings. Finally, General Motors is shifting some vehicle production to Kansas, which will mark the end of its Chevrolet Bolt EV production at that facility.

Why it matters

Tesla is aggressively pivoting its business model to prioritize FSD subscription revenue and position itself as an AI and robotics company, even as it faces significant legal and regulatory headwinds in the United States.