1.2 million vehicles involved in government investigation due to suspension defects. Regulatory risks increase for Tesla, Inc. (TSLA.US) as its stock price declines.

Following multiple complaints from drivers about sudden suspension failures in vehicles from Tesla, Inc., the U.S. automotive safety regulatory agency has launched an investigation into the best-selling electric vehicle models of Tesla, Inc. (TSLA.US) in the U.S. market, as well as its leadership in electric vehicles, AI, autonomous driving, and Siasun Robot & Automation. This latest investigation by U.S. regulators comes amid a surge in Tesla, Inc.'s car sales in Europe and a noticeable increase in the uptake of the Full Self-Driving (FSD) subscription service in North America. According to documents released on Friday by the National Highway Traffic Safety Administration (NHTSA) on its website, the agency has received 156 reports concerning alleged suspension issues in Tesla, Inc. vehicles, which could lead to a loss of vehicle control. This so-called preliminary evaluation involves approximately 1.2 million vehicles, focusing on Model 3 sedans from the 2018 to 2020 model years and Model Y SUVs from the 2021 to 2023 model years. Drivers involved in the aforementioned incidents reported that there were typically no warnings before the suspension failures, though some claimed to have heard unusual noises. The NHTSA stated that no injuries or fatalities have resulted from any of the incidents. Tesla, Inc. did not immediately respond to requests for comment. Cox Automotive estimates that U.S. sales of pure electric vehicles will reach 247,200 units in Q2 2026. While this represents a 14.7% increase from Q1, it is still a 20.5% decline year-over-year, marking the third consecutive quarter of year-on-year declines; pure electric vehicles account for about 5.8% of the U.S. new car market, remaining relatively stable compared to Q1. This data suggests that the U.S. electric vehicle market is stabilizing after a sharp contraction following the withdrawal of subsidies, rather than entering a new phase of rapid growth. Tesla, Inc.'s car sales in the U.S. have also not surged. Cox estimates its sales in Q2 at 124,800 units, a year-on-year decrease of 13.1%; total sales for the first half of the year amounted to 242,100 units, a year-on-year decrease of 10.9%. During the first half, Model Y saw an 8.8% increase, while Model 3 dropped by 34.3%, and both Model S and Model X, as well as the Cybertruck, experienced significant declines. In stark contrast to overall vehicle sales, the commercialization of FSD in North America is indeed surging. Tesla, Inc.'s global active FSD subscription count reached approximately 1.48 to 1.5 million in Q2, a year-on-year increase of 56%; the company also reported record net new subscriptions for the quarter, with over 55% of new vehicle deliveries in North America including an FSD subscription, achieving the highest ever add-on rate. However, this 55% figure is based on North American data and not solely on the U.S., while the 1.48 million represents global statistics. Tesla, Inc.'s sales in Europe are experiencing a robust rebound. Data from the European Automobile Manufacturers Association (ACEA) shows that in the first half of 2026, Tesla, Inc. registered 170,400 vehicles across the EU, European Free Trade Association, and the UK, a year-on-year increase of 54.6%; in June alone, registrations reached 52,600, up 49.9% from the previous year. When considering only the EU, Tesla, Inc.'s registrations increased by 75.4% year-on-year for the first half of the year, and by 72.1% in June. This can be described as a significant sales surge rather than just a normal recovery. The overall demand for pure electric vehicles in Europe is also strengthening, with EU registrations growing to 1.2209 million in the first half of the year, and market share rising from 15.6% to 20.7%. It's worth noting that this round of robust sales rebound in the European market is built on a low base due to a significant decline in 2025, and is driven by factors such as subsidies in France, the electrification of corporate fleets, and the rise in fuel prices influenced by U.S.-Iran tensions. Tesla, Inc.'s global deliveries reached 480,100 units in Q2, a year-on-year growth of about 25%, setting a quarterly record. Reuters believes that the new demand is particularly concentrated in Europe. The NHTSA's investigation into approximately 1.2 million Model 3 and Model Y vehicles for their suspension issues may not immediately reverse the growth in European sales and FSD subscriptions, but it will increase Tesla, Inc.'s recall costs, warranty reserves, brand trust, and regulatory discounts. Currently, Tesla, Inc.'s operational structure shows a clear differentiation: strong recovery in European vehicle demand, rapid growth in FSD penetration in North America, but U.S. overall vehicle sales and automotive profit margins have not entered a phase of strong growth simultaneously. For major Wall Street firms such as Morgan Stanley, which are optimistic about Tesla, Inc.'s stock price, it is not a matter of selling a few more thousand cars that will determine the company's fundamentals and valuation outlook, but rather whether the vast energy storage systems related to Robotaxi, FSD, and Optimus, along with AI, can prove that Tesla, Inc.'s uniquely integrated physical AI system has entered a phase of scaled commercial viability. In other words, according to the Morgan Stanley analyst team, Tesla, Inc. is using the cash flow generated from the automotive business's periodic recovery to fund an unprecedented arms race in cutting-edge AI, FSD autonomous driving software, Robotaxi, energy storage systems, humanoid Siasun Robot & Automation, and the AI chip infrastructure envisioned by Musk's Terafab. Since July, Tesla, Inc.'s stock price has shown continuous weakness in the wake of underwhelming performance and negative catalysts, experiencing a single-month drop of as much as 30%.