In a recent announcement by Chris Kirkham and Abhirup Roy from Reuters, Elon Musk revealed plans for Tesla to introduce “autonomous ride-hailing for money” in Austin, Texas by June. This move raises concerns about safety and legal risks as Tesla pushes forward with unproven driverless technology on public roads in a state with minimal regulations.
Despite past incidents involving Tesla’s driver-assistance systems like Autopilot and Full Self-Driving (FSD), which have been attributed to customer error, Musk now aims to launch driverless taxis, potentially shifting crash liability to Tesla directly.
While Musk has been promising fully self-driving Teslas for years without delivery, recent statements suggest a renewed focus on autonomous vehicles over traditional electric vehicle sales. However, the lack of tangible progress on public roads leaves investors uncertain about Tesla’s timeline and strategy for deploying fully autonomous technology.
Despite inquiries, Tesla and Musk have remained silent on these developments. In Texas, the regulatory landscape favors autonomous vehicle companies, aligning with Musk’s anti-government stance. The state’s laws allow for autonomous vehicles on public roads with minimal oversight, in contrast to California’s strict regulations.
State Senator Kelly Hancock, a supporter of the autonomous-driving legislation in Texas, emphasized the need to foster industry growth without excessive government intervention. The move of Tesla’s headquarters to Austin reflects a shift away from California’s regulations, where firms like GM’s Cruise and Alphabet’s Waymo faced extensive testing requirements before offering paid driverless taxi services.
On a recent earnings call, Musk hinted at releasing an “unsupervised” version of the Full Self-Driving system in California, despite lacking the necessary permits and testing data required by state authorities. While Tesla trails behind in testing miles compared to other companies, Musk’s ambitions for a widespread rollout of autonomous technology remain a subject of speculation.
The uncertainty surrounding Tesla’s autonomous ambitions underscores the ongoing challenges posed by Musk’s ambitious promises.
On the same day Tesla announced disappointing earnings, falling short of analysts’ expectations and following news of its first-ever sales decline in 2024, its shares saw a 3% increase the next day. Elon Musk vowed to introduce “autonomous ride-hailing for profit in Austin, in June.” However, he did not provide details on the number of cars, customer access, or service availability. Musk also mentioned that the rollout of “unsupervised” Full Self-Driving (FSD) in California and various regions in the country would happen later in the year, but without clarifying if this meant driverless-taxi services, a feature for Tesla owners, or something else. Musk stated that the “unsupervised” FSD would be capable of driving with no one in the vehicle.
Investors are left speculating about what Tesla will deliver and when, according to Brian Mulberry, a client portfolio manager at Zacks Investment Management. He emphasized the challenge of interpreting Musk’s statements and expressed confidence as long as Tesla makes progress. Bryant Walker Smith, a law professor focused on autonomous driving, doubted Tesla’s immediate large-scale deployment of autonomous technology in Texas or elsewhere, referencing the underwhelming demonstration of the Cybercab concept.
Texas regulations do not require pre-market approval for deploying driverless vehicles, but Smith questioned Tesla’s readiness for broad autonomous technology deployment. He suggested a small-scale test in limited areas of Austin as a more feasible approach. Autonomous vehicle testing is permitted on Texas roads under standard safety and insurance requirements. Austin has experienced a rise in autonomous vehicles, leading to concerns from residents and officials following near-miss incidents.
Formal complaints have been lodged over incidents involving autonomous vehicles, with one resident citing a Waymo vehicle causing traffic disruptions. GM declined to comment on the matter. Despite these challenges, autonomous vehicle companies like Waymo are working to build trust and improve their services in Austin.
The city of Austin is facing a new challenge as the introduction of driverless vehicles has led to issues where these vehicles fail to respond to hand signals from police officers who are directing traffic. Due to this lack of response, the city has encountered difficulties in issuing tickets to these autonomous vehicles. According to a spokesperson from Austin’s Transportation and Public Works department, efforts have been made to address this issue by allowing complaints to be submitted in municipal court when traffic violations are observed by officers.
In an attempt to collaborate and address concerns, Tesla made contact with Austin officials in May. The city authorities shared vital information regarding local fire and police protocols, provided maps delineating school locations and school zones, and outlined traffic regulations to be followed during special events, as disclosed by the spokesperson.
Expressing frustration over the situation, Austin City Council member Zo Qadri, representing downtown areas frequently visited by robotaxis, expressed dismay at the city’s inability to enforce regulations on private companies utilizing public roads for testing purposes. Qadri emphasized the city’s lack of authority in such matters, stating, “Ultimately, we have no power.”
(Reporting by Chris Kirkham in Los Angeles and Abhirup Roy in San Francisco; editing by Brian Thevenot and Claudia Parsons)
