Comma.ai, the startup that hoped to build a bolt-on autonomy system for cars by the end of this year, has canceled its first product under pressure from the National Highway Traffic Safety Administration.

George Hotz, the founder of the company, has published a letter he received from the regulators. In the letter, the NHTSA’s chief counsel, Paul Hemmerbaugh, demanded that Comma.ai provide evidence that its device complies with safety regulations against which all motor vehicle equipment is judged. “We are concerned that your product would put the safety of your customers and other road users at risk,” he explains.

The $999 device in question, the Comma One, is unlike many autonomous driving systems in that it’s a retrofit device. The small box contains only camera sensors; for more data about what’s happening on the road, it hijacks the radar systems currently fitted to higher-end cars to aid their intelligent cruise control systems. Hotz has said that the system is “about on par with Tesla Autopilot” in terms of functionality.

Perhaps unsurprisingly, though, the NHTSA is worried about how the device works with the car. “Installation of your product could adversely affect the performance of the vehicle’s safety systems, or otherwise render the vehicle unsafe,” writes Hemmerbaugh.

The NHTSA also questions Comma.ai’s claims, made on its blog, that the “system does not remove any of the driver's responsibilities from the task of driving.” Hemmerbaugh points out that there is a “high likelihood” that drivers would use the device in “a manner that exceeds its intended purpose.” He is likely referring to a fatal crash earlier this year that involved a Tesla driver using its autonomous Autopilot feature.

Tesla itself has upgraded its Autopilot system to automatically disengage when drivers remove their hands from the steering wheel for too long. Other automakers are also baking in similar functionality.

Rather than meeting the regulatory demand of the NHTSA, however, Hotz has publicly stated that the device is canceled, and Comma.ai will instead explore “other products and markets.” He added that he would “much rather spend [his] life building amazing tech than dealing with regulators and lawyers. It isn't worth it.”

Hotz has previously acknowledged the limitations of the device, pointing out that it was very much designed to be a driver assistance system rather than a full-on autonomy package. But he had also asserted—wrongly, as it turns out—that it “should be legal” because it simply acted as an upgrade to similar technology already found in the cars it would be made available for.

Other companies will be watching the news with interest, because it’s not just Comma.ai that’s working on add-on self-driving kits. The likes of Delphi, MobilEye, and Oxbotica are also developing systems that could be retrofitted to vehicles to make them autonomous. The NHTSA will no doubt be keeping a close eye on their devices, too—though they do all have the benefit of already working closely with the car industry, a luxury Comma.ai does not possess.

(Read more: Scribd, “This Box Could Make Your Car Autonomous for Just $1,000,” “Plug-and-Play Autonomy Could Soon Turn Your Car Into a Self-Driving Robot,” “Tesla Crash Will Shape the Future of Automated Cars”)