Feds Close Power Steering Investigation Into 376,000 Tesla Model 3 and Model Y EVs

June 27, 2026 Avinash

U.S. auto safety regulators have officially concluded a major federal investigation into a potential power steering defect affecting more than 376,000 Tesla electric vehicles.

The National Highway Traffic Safety Administration (NHTSA) announced the closure on Saturday, June 27, 2026, citing a successful over-the-air (OTA) software remedy deployed by Tesla that significantly mitigated the safety risk and led to a dramatic drop in driver complaints.

The investigation, which had been elevated to the rigorous status of an “engineering analysis” by the agency’s Office of Defects Investigation (ODI), focused specifically on 2023 model year Tesla Model 3 sedan and Model Y crossover variants.

With the probe now closed, Tesla clears a notable regulatory hurdle regarding its mechanical hardware, even as the EV maker continues to navigate separate federal scrutiny over its automated driving features.

Table of Contents

Evolution of the Federal Probe

The regulatory scrutiny began in July 2023, when NHTSA launched a preliminary evaluation after receiving multiple reports from Tesla owners detailing a sudden, unexpected loss of steering control. Many drivers described an immediate inability to turn the steering wheel or a sharp, sudden increase in the manual effort required to guide the vehicle.

By early 2024, the government agency upgraded the investigation to a formal engineering analysis to thoroughly evaluate whether the hardware or software constituted a critical safety defect.

Technical Breakdown: What Caused the Loss of Steering Assist?

According to regulatory documents, Tesla’s internal investigation isolated the root cause to an electrical anomaly within the vehicle’s electronic power-assisted steering (EPAS) system.

The Defect: Tesla identified an “overvoltage breakdown”—a condition where the applied voltage spikes past the maximum design limits of the hardware.
The Impact: This electrical surge overstressed vital motor drive components mounted directly onto the printed circuit board (PCB) of the steering Electronic Control Unit (ECU).
Driver Experience: When the circuit board components failed, the vehicle immediately disabled primary power assistance, triggering a prominent warning message on the central touchscreen interface: “Steering assist reduced. Steering may require increased effort.” Some owners reported that the steering began feeling “notchy” or “clicky” just before the system failed entirely.

How the Backup Steering System Responded

During its engineering analysis, ODI closely evaluated how Tesla’s integrated fail-safes managed the hardware failure. The vehicle’s architecture was designed to divert power-assisted steering responsibilities to secondary, backup motor drive components if a primary component failed while traveling above 0 mph.

Vehicle Speed	System Fail-Safe Behavior	Driver Steering Status
Above 0 mph	Diverts power to secondary backup motor drive	Power assist maintained until vehicle stops
At 0 mph (Complete Stop)	Disables backup power-assisted steering	Complete loss of assist; manual steering only

Once the vehicle slowed to a complete stop at 0 mph, the backup system would cut out entirely, leaving the driver with purely manual, unassisted steering. Normal power assistance could not be restored until the physical steering ECU hardware was replaced at a Tesla service center.

The Software Recall and Case Closure

To rectify the overvoltage flaw, Tesla formally issued safety recall 25V092 in early 2025, which covered approximately 376,241 vehicles in the United States. While Tesla maintained that the filing was independent of NHTSA’s active investigation at the time, the remedy proved to be the decisive factor in ending the probe.

Rather than requiring physical component replacement for the entire fleet, Tesla deployed a proactive over-the-air software fix—version 2023.38.4. This specialized software update was engineered to carefully monitor voltage thresholds and actively prevent the overvoltage conditions that were overstressing the circuit boards.

NHTSA Findings: The Office of Defects Investigation reviewed extensive vehicle field data and found that consumer complaint volumes dropped off sharply following the fleet-wide deployment of the software patch.

Citing the evident real-world effectiveness of Tesla’s digital remedy, NHTSA opted to close the engineering analysis. The federal agency did note, however, that the closure does not mean a safety defect never existed, emphasizing that it will continue monitoring the long-term field performance of the software and retains the right to reopen the investigation if new steering issues emerge.

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