Tesla abandons full self-driving?… "If necessary, we'll put a steering wheel on the Cybercab" [Stocks+]

Denholm, Tesla board chair, remarks on the 28th

Hints at modifying vehicle design as convincing regulators becomes harder

GM also halted its autonomous driving business 'Cruise division'

U.S. electric-vehicle maker Tesla has left open the possibility of selling the next-generation model, the Cybercab, as a conventional vehicle with a steering wheel and pedals instead of offering it solely as an autonomous robo-taxi.

Robin Denholm, chair of Tesla's board, told Bloomberg in an interview on the 28th (local time), "If a steering wheel is necessary, we can put one on. We can also install pedals."

"If necessary, we'll sell it like a regular car"

Denholm said, "The Cybercab is the vehicle that investors often call 'Model 2,' a lower-priced car than the Model 3," hinting at a shift in Tesla's product strategy that had been focused on commercializing full self-driving technology.

CEO Elon Musk unveiled a prototype of the Cybercab without a steering wheel and pedals for the first time last October at a film studio site near Los Angeles. At the time he emphasized that "making a $25,000 regular electric car is meaningless" and that "it directly contradicts Tesla's philosophy," but Denholm's recent remarks show some retreat from that position.

Bloomberg interpreted Denholm's comments as a move to lower market-entry barriers by partially modifying vehicle design in response to changes in the regulatory environment. Tesla aims for mass production in 2026 and is trying to persuade regulators to relax safety standards related to autonomous vehicles. However, U.S. regulators still legally require steering wheels and pedals to be installed.

Full autonomy bumping into regulatory walls

The U.S. National Highway Traffic Safety Administration (NHTSA) allows companies to sell only up to 2,500 vehicles per year that lack steering wheels and pedals. Because of this, a market made up solely of fully autonomous robo-taxis would inevitably be limited in size.

This is similar to the case of competitor General Motors (GM). GM waited more than two years for approval of its autonomous-only model, the Cruise Origin, but when approval was delayed it ultimately scrapped the plan and last year suspended the Cruise division entirely. Tesla may also shift to designs that include traditional driving controls to avoid the same regulatory barriers.

Is Tesla taking a pragmatic route?

Denholm said, "Originally, the initial design proposal for the Model Y also did not include a steering wheel and pedals," adding, "If something is missing and makes selling difficult, we will work with regulators to include the necessary elements."

Investors see the remarks as a signal that "Tesla has ultimately returned to a pragmatic route." Full self-driving technology emphasized by Musk is expected to take more time to commercialize, and Tesla seeks to secure growth momentum in the stalled market for affordable electric vehicles. The Cybercab is scheduled for mass production next year, and there is a growing possibility it will be sold to general consumers as a low-cost EV alongside the robo-taxi model.

New York=Park Shin-young, correspondent nyusos@hankyung.com