*

Tesla needs to apply for driverless testing, deployment

permits

in California

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Company seeks to test robotaxis in Phoenix

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Robotaxi growth key for Tesla as EV sales slump

(Rewrites throughout to reflect comments from California

regulators and add background)

By Abhirup Roy

July 10 (Reuters) - Tesla has yet to apply for

regulatory permits it needs to operate driverless taxis in

California, two state regulators said on Thursday, a day after

CEO Elon Musk said the company would expand its robotaxis to the

San Francisco Bay Area within two months.

"To date, Tesla has not applied for either a driverless

testing or deployment permit," a spokesperson for California's

Department of Motor Vehicles said in an email to Reuters on

Thursday.

The California Public Utilities Commission (CPUC), which in

March issued the first in a series of permits Tesla requires,

said on Thursday the company had not yet applied for any new

permits.

All it has so far is a transportation charter-party carrier

permit (TCP) typically associated with chauffeur-operated

services, which allows Tesla to own and control a fleet of

vehicles and transport employees on pre-arranged trips.

The successful expansion of robotaxis will be crucial to

Tesla's future as sales of its aging lineup of electric vehicles

have slumped with rising competition and a backlash against

Musk's embrace of far-right political views.

Much of the company's trillion-dollar valuation hangs on

Musk's bet on robotaxis and humanoid robots that are powered by

artificial intelligence.

Tesla reached out to Arizona late last month to start a

certification process for an autonomous vehicle ride-sharing

service, and a decision is expected by the end of this month,

the state's transportation department said on Thursday.

"They have expressed interest in operating within the

Phoenix Metro area," Arizona's Department of Transportation said

in an email to Reuters. Tesla has applied to test and operate

both with and without a driver, it said.

Tesla shares, down 23% this year, closed up nearly 5% on

Thursday. Tesla did not respond to requests for comment.

Tesla last month rolled out a small test of its robotaxi

service in a limited area of Austin, Texas, with about a dozen

vehicles, a select group of passengers and many restrictions,

including a safety monitor in the front passenger seat.

Even as social media videos showed multiple traffic problems

and driving issues over the first few days, CEO Elon Musk said

in response to a post on his social media platform X on

Wednesday that Tesla would expand the service to a larger area

in the city this weekend.

When another user on X asked about an expansion to the Bay

Area, Musk replied, "Waiting on regulatory approvals, but

probably in a month or two."

While Tesla faced almost no regulation in Texas, California

tightly controls where and how firms can operate autonomous

vehicles and requires testing data for permits.

The California regulators Reuters contacted did not say how

long it would take to review a permit application.