Tesla launches Robotaxi testing in San Francisco, bypassing regulatory approvals

Electric car maker Tesla has notified employees in a company newsletter that it may begin test rides of unmanned Tesla Robotaxi in San Francisco as early as July 25, Business Insider reports. The email says that some Tesla owners will be sent invitations to use the new service, but that rides in the robotaxi will be charged. However, according to data from Reuters, Tesla does not have permission to offer paid services on unmanned vehicles in California. Analysts note that first and foremost, the robotaxi operator, which is trying to find a new source of revenue, now needs to secure regulatory support.

Tesla's July 24 letter to employees, which followed by Business Insider, says the San Francisco test will begin this weekend but could be rescheduled "for Friday." The limited area within which the service will operate covers much of the Bay Area: the Marin District, most of the East Bay, San Francisco and the area as far north as San Jose. During the initial phase of the test, observer drivers will be in the cars ready to take over the controls.

The testing will be closed, only accessible by invitation from Tesla, and you'll have to pay for the ride.

According to public records, Tesla hired 224 test drivers in California in December and registered 104 vehicles with a valid autonomous test license, Business Insider writes.

Tesla has yet to apply for the necessary permits to transport passengers and charge for rides in fully autonomous vehicles, California regulators told Reuters on July 23. In order to test and provide autonomous vehicle services in the state, the company needs a series of permits from both the California Department of Motor Vehicles (DMV) and the California Public Utilities Commission (CPUC).

The state does not have a specific timeframe for issuing such permits. However, for example, Waymo (owned by Alphabet), which provides autonomous cab services in Los Angeles and the San Francisco Bay Area, took nine years before it was allowed to charge passengers in unmanned cabs in 2023. During that time, the company conducted test rides of more than 20 million miles and received seven different regulatory approvals, wrote Reuters. According to the latest state data, Tesla has only driven 562 miles (904 kilometers) in California tests since 2016 and has not reported on miles driven in autonomous driving mode in six years.

Tesla has only received the first of the necessary permits, the agency claims. This is a permit from the DMV to test autonomous driving software in California with a driver in the cabin, Business Insider clarifies. The CPUC also issued Tesla a permit to transport employees, the publication found out.

Tesla did not respond to requests for comment from either Business Insider or Reuters.

During a conf call with investors on July 23, CEO Ilon Musk said the robotaxi will operate with a test driver in the front seat during the first phase of testing in the Bay Area. In Austin, Texas, where Tesla launched a similar service last month, the cars also have spotters in them - they sit in the passenger seat. If the car deviates from its route, remote operators can also take over.

Regulatory hurdles pose a challenge for Tesla as the company needs to gain the trust of security experts before launching fully autonomous services, Reuters writes.

"Tesla can't afford to make a mistake with its robotaxi service," Camelthorn Investments advisor and Tesla shareholder Sean Campbell told the agency. He specified that "the wheels are literally falling off" for the auto division, referring to the fact that electric car sales are falling in almost all key markets. That's why a project that will shift investors' attention to the company's prospects is so important.

During a confab on Tesla's financial results, Musk said the automaker is getting regulatory approval to launch robot cabs in several states, including California, Nevada, Arizona and Florida. Musk expects the service to reach "half of the U.S. population by the end of this year" and be rolled out nationwide by the end of next year.

Paul Miller, a leading analyst at research and consulting firm Forrester, pointed out Musk's remark to Musk's claim that the robotaxi startup would cover half the U.S. population, "if regulatory approvals are obtained."

"This caveat matters because it takes time to obtain such approvals," the analyst emphasized.

Some investors also want more specifics on the Austin service launch. Deepwater Asset Management managing partner and Tesla investor Gene Munster told Reuters he was disappointed by the lack of details at the conf call. Tesla did not give a timeline for the service's launch to the general public, nor the number of cars that will be involved.

"It gave the impression that Musk was deliberately avoiding clear predictions about how things would unfold," Munster said.

This article was AI-translated and verified by a human editor