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Silicon Flash > Blog > Business > Challenges facing Tesla’s robotaxi launch in San Francisco
Business

Challenges facing Tesla’s robotaxi launch in San Francisco

Published July 26, 2025 By Juwan Chacko
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Challenges facing Tesla’s robotaxi launch in San Francisco
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Tesla is set to introduce a more exclusive version of its early robotaxi service in San Francisco this weekend, as reported by Business Insider. This follows an initial launch in Austin, Texas last month.

The company is planning to invite Tesla owners to participate in testing the service, according to the report.

However, there are concerns about potential violations of state regulations by Tesla, especially if the vehicles operate autonomously without the necessary permits. In California, two state agencies oversee different aspects of autonomous vehicles. The California Department of Motor Vehicles regulates the testing and deployment of autonomous vehicles, requiring permits for various stages of testing and deployment. Currently, Tesla only holds a permit for testing autonomous vehicles with a human safety operator present, not for driverless testing or deployment.

Furthermore, Tesla lacks the proper permits from the California Public Utilities Commission, which governs the commercial aspects of ride-hailing and chartered transportation, whether operated by humans or autonomous systems.

According to CPUC spokesperson Terrie Prosper, Tesla holds a Transportation Charter Party permit, allowing human drivers to provide charter services with traditional vehicles, not autonomous ones.

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This distinction is crucial, as it indicates that Tesla does not have the necessary permits for passenger transportation using autonomous vehicles. The company has not received approval from the CPUC to offer autonomous passenger services, whether paid or unpaid, with or without a human driver present.

As Tesla moves forward with its robotaxi deployment, there are concerns about potential violations of state regulations, even if there is a human safety operator behind the wheel during the rides.

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The expansion into California coincides with the DMV’s efforts to restrict Tesla from selling vehicles in the state due to ongoing legal disputes over the company’s claims about its cars’ self-driving capabilities. Tesla is also facing a lawsuit related to fatalities involving its Autopilot driver assistance system.

Despite these challenges, Tesla has yet to demonstrate the full capabilities of its Full Self-Driving software for a robotaxi network. The current service in Austin is limited in scope, with safety operators present to intervene if needed. Tesla’s CEO, Elon Musk, has expressed ambitions to expand the service to other states like Florida and Arizona, where the company is undergoing certification processes for testing and operating autonomous vehicles.

Update: This story has been updated to include new information from the CPUC.

TAGGED: Challenges, Facing, Francisco, launch, Robotaxi, San, Teslas
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