• Elon Musk states Tesla is targeting the removal of safety drivers from its robotaxi service in California by the end of 2025.
  • The announcement comes amid heightened regulatory scrutiny from California's DMV and CPUC, which have clarified that Tesla cannot currently offer fully autonomous rides.
  • Tesla has already shifted its pilot program in Texas to require a safety monitor in the driver's seat following new state rules.

Tesla Inc. Chief Executive Officer Elon Musk said the electric-vehicle maker will likely remove the safety driver from its robotaxi rides in California by the end of this year, a bold target that would mark a significant leap toward fully autonomous operations. The announcement, made without detailing a specific regulatory pathway, aims to transition the company's Full Self-Driving (FSD) system from its current supervised, Level 2 status to truly driverless capabilities.

However, the ambitious timeline faces immediate headwinds from state regulators. The California Department of Motor Vehicles and the California Public Utilities Commission have both clarified that Tesla is not permitted to offer fully autonomous vehicle rides without a human driver in the current environment. Regulatory hearings are ongoing, and people familiar with the matter say the state could move to suspend Tesla’s dealer license if it is found to have misled consumers about its technology's capabilities.

“What institutional investors like us are really focused on is regulatory stability,” a fund manager specializing in mobility tech said, asking not to be identified discussing a single company. “A pronouncement is one thing, but achieving the necessary approvals from multiple jurisdictions is another.”

The push comes as Tesla has adjusted its operations in other key markets. In Texas, the company recently shifted safety monitors to the driver’s seat for its robotaxi pilots due to tightened state rules that require higher safety standards and clear reporting protocols for autonomous vehicle testing. These services remain supervised and are not classified as driverless.

Tesla did not immediately respond to a request for comment on how it plans to navigate the regulatory hurdles in California. The company’s FSD technology remains under investigation by the National Highway Traffic Safety Administration following a recall of over 2 million vehicles last year to address issues with its driver-attention monitoring system.

Musk’s latest forecast reiterates a long-standing goal for Tesla but places it against a backdrop of increased legal and public scrutiny over the safety of autonomous driving systems. The success of this initiative is critical for Tesla as it seeks to open new revenue streams beyond vehicle manufacturing amid pressure on its core auto profit margins.

Correction: An earlier version of this article misstated the model years of vehicles involved in the NHTSA investigation. The recall affected vehicles from a range of model years, not just 2023.