Tesla CEO Elon Musk announced that the company plans to launch driverless ride-hailing services in California and Texas by 2025. He made this claim during Tesla’s earnings call, saying that the company aims to have driverless Teslas offering paid rides next year.
Currently, Tesla provides an app-based ride service for its employees in the San Francisco Bay Area. Musk had previously teased the idea at a recent event, where he revealed the “Cybercab,” a small two-seater without a steering wheel or pedals, designed to navigate using cameras and AI. However, the announcement had left investors disappointed due to the lack of a clear business plan at that time.
Tesla faces regulatory hurdles, especially in California, where permits are required for fully autonomous vehicles to transport paying customers. Unlike Alphabet’s Waymo, which took years to secure approval after extensive testing, Tesla hasn’t applied for a permit to test driverless cars in the state. Tesla last reported using a permit for autonomous vehicle testing in 2019, but those tests required a safety driver.
Despite the challenges, Musk remains optimistic about securing the necessary permits by next year, although he admits that regulatory approval is out of Tesla’s full control. Meanwhile, Texas has fewer restrictions on autonomous vehicles, but companies there still test for months or even years before launching paid services.
Tesla’s “Full Self-Driving” (FSD) system, which will power the robotaxi fleet, has drawn attention from regulators. Recently, the U.S. National Highway Traffic Safety Administration (NHTSA) opened an investigation into 2.4 million Tesla vehicles with FSD after several accidents, including a fatal crash in 2023. Despite this, Musk’s announcement affected the market, causing shares of ride-hailing apps to drop by 2.3% in after-hours trading.
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