Elon Musk promises to launch self-driving rental cars next year. Can this "pie in the sky" be realized this time?

Elon Musk's plan to promote autonomous driving is facing significant regulatory challenges.

During the overnight Q3 earnings call, Tesla CEO Elon Musk announced plans to launch a Robotaxi (autonomous driving taxi) service for the public in California and Texas next year.

However, this plan is facing daunting regulatory challenges.

For example, in California, to operate a Robotaxi service locally, a company must obtain two permits: an autonomous vehicle testing permit issued by the California Department of Motor Vehicles (DMV) and an operating permit issued by the California Public Utilities Commission (CPUC).

Currently, Tesla only holds the lowest-level autonomous vehicle testing permit from the California DMV, allowing it to conduct tests with a safety driver present.

According to Reuters, both the California DMV and CPUC have stated that Tesla has not applied for any relevant permits and the last report of using its autonomous vehicle testing permit was in 2019.

Based on media reports, Waymo, which is currently providing Robotaxi services in the San Francisco Bay Area, Los Angeles, and Phoenix, Arizona, spent several years conducting millions of miles of testing before obtaining the first operating permit from the CPUC under its parent company Alphabet, highlighting the difficulty of obtaining permits.

In comparison, Texas has much more lenient regulatory requirements for autonomous vehicles than California, but typically requires companies to conduct several months or years of testing before deploying paid services.

During the call, Musk also hinted at potential difficulties in obtaining regulatory approval from California authorities, stating:

"This is not something we can fully control. But if we don't get approval next year, I would be shocked."

Ross Gerber, a Tesla shareholder and CEO of Gerber Kawasaki Wealth and Investment Management, commented:

"Dealing with regulatory agencies is a very difficult process, and no one should think of it as just a 'walk in the park'."

Meanwhile, Tesla's Full-Self Driving (FSD) technology appears to still have room for improvement. Last week, following four collision incidents (including one fatal accident), the National Highway Traffic Safety Administration (NHTSA) launched an investigation into 2.4 million Tesla vehicles equipped with FSD.

NHTSA stated that based on preliminary assessments, these accidents occurred when FSD was activated in conditions of reduced road visibility, such as glaring sunlight or foggy environments