Elon Musk recently walked back his impossible extremely ambitious robotaxi goals, shifting from a target of reaching “half the U.S. population by the end of 2025” to a more “modest” goal of launching in “eight to 10 U.S. metro areas” within the next two months.
Now, in a development that should surprise no one, a new report suggests that even this heavily scaled-back timeline is facing significant obstacles.
According to a report from The Information, Tesla is lagging on the most basic regulatory front. The company has reportedly not yet completed the necessary paperwork to begin offering robotaxi rides in Arizona and Nevada, two of the three additional states Musk has targeted for expansion by the end of 2025.
The third state, Florida, is expected to be an easier lift due to its looser regulations, which fits Tesla’s pattern of prioritizing optics over navigating real regulatory scrutiny.
Meanwhile, in Tesla’s original home state of California, the company is still testing its service with a human safety driver sitting in the driver’s seat. This is because its current permit only allows a human to “drive a traditional vehicle.” Therefore, the “robotaxi” service in California is simply a ride-hailing service with the Tesla drivers using “Supervised Full Self-Driving.”
To operate a true autonomous service, with or without a safety driver present, Tesla would need to apply for a separate permit—one that its chief rival, Alphabet’s Waymo, already possesses and uses to offer rides in San Francisco and Los Angeles. As we’ve noted previously, Tesla has tellingly not even applied for this autonomous vehicle permit, which would likely require it to disclose critical disengagement and safety data it is unwilling to make public.
These regulatory and bureaucratic slowdowns clash with the grand vision Musk is selling. The CEO has stated that the success of Robotaxi is “critical” to his plan to pivot Tesla into an “autonomous driving and humanoid robotics company.”
This vision is also directly tied to his unprecedented new compensation package, which shareholders are set to vote on next week. That package hinges on massive goals, including putting 1 million Robotaxis into service and lifting Tesla’s market capitalization to an astronomical $8.5 trillion.
For now, the robotaxi service continues to use a version of the Model Y. The purpose-built “Cybercab,” a two-seater vehicle with no steering wheel, isn’t planned for mass production until the second quarter of 2026.
Tesla threw cold water on that program too this week as it said that it might add a steering wheel to the vehicle, which would facilitate the regulatory approval.
Electrek’s Take
This is predictable, but still frustrating. We’ve been saying for years that the technology is only half the battle; it’s far from solved. The other half is the massive, state-by-state, and even city-by-city, regulatory grind.
On the technology front, we reported yesterday that Tesla’s Robotaxi crash rate is higher than Waymo’s, even with its safety monitors preventing an unknown number of additional potential accidents.
Tesla still has a lot of work to do to make the technology safe enough to remove its safety monitor without negatively affecting safety.
On the other front, it’s one thing for Musk to set an “Elon time” goal, but it’s another to seemingly ignore the basic bureaucratic legwork required to operate in new states. To hear that Tesla hasn’t even filed the paperwork in places like Arizona and Nevada is a significant failure. It suggests the bottleneck isn’t just performance.
This whole endeavor continues to look like a dangerous game of smoke and mirrors, prioritizing optics to justify a compensation package and stock valuation that are completely detached from the reality of the technology or the regulatory hurdles ahead.
In short, Tesla either doesn’t really believe it is ready to scale Robotaxi, unlike what it has been claiming to shareholders, or it doesn’t want to release critical data to regulators, which would suggest the same thing.
In the meantime, they will deploy ride-hailing services with drivers and call it “Robotaxi”, like they do in the Bay Area.
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