California transportation regulators said Friday that Tesla (NASDAQ: TSLA) cannot operate autonomous vehicles for passenger service in the state, restricting the electric vehicle maker to human-driven cars only as CEO Elon Musk pushes to expand the company’s robotaxi ambitions.
The California Public Utilities Commission told CNBC that Tesla “is not allowed to test or transport the public (paid or unpaid) in an AV with or without a driver” and can only provide rides “in a non-AV, which, of course, would have a driver.”
The clarification comes after Tesla notified regulators Thursday that it plans to expand its transportation service to “friends and family of employees and to select members of the public” across the San Francisco Bay Area. Tesla received approval in March for a charter-party carrier permit that allows it to operate a ride service with human drivers, similar to limousine companies.
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However, Tesla has not applied for permits required to test or deploy autonomous vehicles for passenger service, according to both the CPUC and California Department of Motor Vehicles. The DMV said Tesla has held a testing permit since 2014 that allows autonomous vehicles with safety drivers present, but prohibits collecting fees from passengers.
The regulatory restrictions highlight the gap between Musk’s robotaxi promises and current operational reality in California, Tesla’s largest U.S. market. During an earnings call last week, Musk suggested expanding Tesla’s Austin, Texas robotaxi pilot to the Bay Area and other markets.
Tesla currently operates a limited robotaxi service in Austin using Model Y vehicles with both remote supervision and human safety operators. The service operates only during daylight hours, in good weather, and on roads with speed limits up to 40 mph.
Meanwhile, Tesla faces a separate legal challenge in California, where the DMV is seeking to suspend the company’s vehicle sales license for allegedly misleading consumers about its Autopilot and Full Self-Driving capabilities. A five-day administrative hearing began Monday in Oakland.
California accounts for about one-third of electric vehicle sales in the United States, making regulatory approval crucial for Tesla’s autonomous vehicle ambitions.
Information for this story was found via Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
