On Wednesday, Tesla CEO Elon Musk revealed plans to introduce driverless ride-hailing services to the public in California and Texas next year. This ambitious move is likely to face substantial regulatory and technical challenges.
“We expect to have driverless Teslas offering paid rides by next year,” Musk stated during Tesla’s quarterly earnings call. He also noted that the company currently operates an app-based ride-hailing service for employees in the San Francisco Bay Area. Musk’s remarks expanded on a promise made at Tesla’s robotaxi unveiling two weeks prior, where he projected “unsupervised” self-driving in certain Tesla vehicles by 2025. The lack of a clear business plan at that event led to a drop in Tesla’s stock, but on Wednesday, Tesla regained some investor confidence by forecasting a rise in vehicle sales for the coming year.
In California, Tesla faces considerable hurdles in acquiring the necessary permits to offer fully autonomous rides to paying customers.
Alphabet’s Waymo, which operates paid autonomous rides in the Bay Area, Los Angeles, and Phoenix, Arizona, spent years conducting millions of miles of testing before receiving its first permit from the California Public Utilities Commission (CPUC), which oversees ride-hailing services.
According to the California Department of Motor Vehicles (DMV), which regulates autonomous vehicle testing and deployment, Tesla last utilized its autonomous vehicle testing permit in 2019, which required a safety driver.
The agency also confirmed that Tesla neither holds nor has applied for a permit to test driverless vehicles.
Tesla did not provide a comment in response to inquiries.
As for the ride-hailing service Tesla offers to employees in the Bay Area, the California Public Utilities Commission (CPUC) clarified that no permit is required since employees are not considered passengers.
During Tesla’s robotaxi event on October 10, Elon Musk introduced a two-seater, two-door “Cybercab” without a steering wheel or pedals, designed to navigate roads using cameras and artificial intelligence.
On Wednesday, Musk acknowledged the challenges in California, stating, “It’s not something we totally control,” but remained optimistic, adding, “I would be shocked if we don’t get approval next year.”
In Texas, regulations for autonomous vehicles are much less stringent than in California, though companies often conduct months or years of testing before rolling out paid services.
Tesla’s Full Self-Driving (FSD) system, which underpins its robotaxi ambitions, has faced regulatory scrutiny. Last week, the U.S. National Highway Traffic Safety Administration (NHTSA) launched an investigation into 2.4 million Tesla vehicles with FSD after reports of four crashes, including one fatal accident in 2023.
Nevertheless, the prospect of Tesla introducing a robotaxi fleet caused shares of ride-hailing apps to drop 2.3% in after-hours trading.
