How Tesla's plans for ‘unsupervised FSD' and robotaxis could run into red tape

Tesla's FSD and Robotaxi Plans - Tesla CEO Elon Musk announced plans to release an "unsupervised" version of Full Self-Driving (FSD) in Texas and California by 2025 for certain Model 3 and Model Y vehicles [1] - Tesla aims to begin production of robotaxis without steering wheels or pedals by 2026 or 2027 [1] - The term "unsupervised FSD" could refer to either a Level 4 fully autonomous system or a Level 3 "hands-off, eyes-off" system [2] - Tesla plans to launch the unsupervised FSD software in California and Texas in 2025, though it is unclear if it will require additional costs for customers [2] Regulatory Landscape for Autonomous Vehicles - Texas allows companies to deploy autonomous vehicles (AVs) with minimal regulatory oversight, provided they comply with traffic laws, have recording devices, and carry liability insurance [3] - California has stricter regulations, requiring permits for drivered testing, driverless testing, and deployment of AVs [3] - Tesla currently holds a drivered testing permit in California but has not applied for driverless testing or deployment permits [3] - To operate a Level 4 system, Tesla would need both driverless testing and deployment permits, while a Level 3 system would only require a deployment permit [3] - Tesla would need additional permits from the California Public Utilities Commission (CPUC) to enter the ride-hail business [3] Challenges in Robotaxi Production - Tesla faces regulatory hurdles in producing robotaxis without traditional driver controls, as federal motor vehicle safety standards (FMVSS) currently require exemptions for such vehicles [5] - The National Highway Traffic Safety Administration (NHTSA) has only granted one exemption to date, for Nuro's low-speed delivery vehicles [5] - General Motors and Amazon's Zoox have faced delays or denials in obtaining similar exemptions for their autonomous vehicles [5] - NHTSA has delayed a rule-making process that could accommodate AVs without human controls, further complicating Tesla's timeline [5] Industry Comparisons - Mercedes is the only automaker with a permit to operate a Level 3 system (Drive Pilot) in California, but it is limited to highways, daytime use, and speeds of 40 mph [4] - Tesla's ambitious timeline for robotaxi production contrasts with its past missed deadlines, such as the 2020 claim of having 1 million robotaxis on the road [5] Market Reaction - Tesla's stock fell nearly 10% following the robotaxi reveal event, reflecting investor concerns over regulatory challenges and lack of clarity on Tesla's strategy [5]