Tesla to launch autonomous driving ride-hailing service next year? Musk's vision faces significant regulatory challenges

According to the financial news app Zhitong Finance, Tesla (TSLA.US) CEO Elon Musk stated during the earnings conference call on Wednesday that the company will launch autonomous driving ride-hailing services to the public in California and Texas next year. Musk said, "We believe that next year we will be able to offer paid ride-hailing services with autonomous Tesla vehicles."

However, Musk's commitment may face significant regulatory challenges. In California, Tesla is expected to face a tough challenge in obtaining the necessary permits to provide fully autonomous driving services to paying customers. Alphabet's (GOOGL.US) autonomous driving company Waymo spent several years conducting millions of miles of testing before obtaining the first permit from the California Public Utilities Commission (CPUC) for regulated ride-hailing services.

The California Department of Motor Vehicles, which is responsible for regulating autonomous vehicle testing and deployment in California, previously stated that although Tesla has held a permit to test autonomous driving technology with a human safety driver present since 2015, the company has not reported using the permit since 2019. The agency also mentioned that Tesla has not applied for a permit to test autonomous driving without a human driver.

Musk acknowledged the potential regulatory challenges in California, stating, "This is not something entirely within our control." However, he added, "If we don't get approval next year, I would be shocked."

Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management and a Tesla shareholder, said, "Dealing with regulatory agencies is a very difficult process, and no one should think it's as simple as 'taking a walk in the park.'"

Mary "Missy" Cummings, a professor of engineering at George Mason University and former advisor to the National Highway Traffic Safety Administration (NHTSA), has expressed concerns about the Autopilot driving assistance feature of Tesla. She added that before Tesla provides testing data to California, "it will take them several years to obtain the necessary permits in California."

In contrast, Texas has much lower regulatory requirements for autonomous vehicles, but companies typically need to conduct several months to several years of testing before deploying paid ride-hailing services.

Regulations related to the deployment of autonomous vehicles are largely determined by individual states in the United States. Musk mentioned during the earnings conference call that there should be a "national-level approval process for autonomous driving."