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Texas law allows Tesla's robotaxi service without special

permits

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Musk has repeatedly promised fully self-driving taxis are

coming

soon

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Austin has experience with Waymo and Cruise driverless

taxis

By Chris Kirkham, Abhirup Roy

Feb 10 (Reuters) - Elon Musk told investors in late

January that Tesla would roll out "autonomous ride-hailing for

money" by June in Austin, Texas - a state where the company

faces almost no regulation, raising questions about how much

safety and legal risk Tesla is willing to take on as it deploys

unproven driverless technology on public streets.

Tesla has long blamed its customers for accidents involving the

driver-assistance systems it calls Autopilot and Full

Self-Driving (FSD), noting that it warns Tesla owners to stay

ready to take over driving. Now Musk is vowing to deploy truly

driverless taxis, a move legal experts say would place crash

liability squarely on Tesla.

Musk has promised fully self-driving Teslas for about a decade

and failed to deliver. The promises have grown more frequent,

with more immediate timelines, in recent months as Musk has

shifted Tesla's focus toward autonomous vehicles and away from

mass-market EV sales.

Yet Musk's elusive comments continue to keep investors

guessing about when - and at what scale, with what business

model - Tesla will finally deploy fully self-driving technology

that, to date, it has never displayed on public roads.

Tesla and Musk did not respond to requests for comment.

Nothing in Texas law would stop Tesla from launching a robotaxi

service. The state takes a hands-off regulatory approach that

aligns with Musk's increasingly anti-government political

stances as an advisor to U.S. President Donald Trump.

State law allows autonomous-vehicle companies free access to

public streets provided they are registered and insured, like

any human-driven car, and equipped with technology to record

data about any potential crashes. No state agency issues permits

for or oversees driverless-taxi services - and state law forbids

cities and counties from enacting their own driverless-vehicle

regulations.

State Senator Kelly Hancock, who sponsored the state's 2017

autonomous-driving legislation, said the legislature wanted to

promote the industry's growth in a competitive marketplace and

avoid barriers to entry.

"Being a conservative, I wanted to minimize government's

impact," he told Reuters. "We can't have a thousand different

regulations. That's how you kill an industry."

Musk moved Tesla's headquarters to Austin in late 2021 from

California, where regulators tightly control where and how firms

can operate autonomous vehicles. The only two companies that

have secured permits to operate paid driverless taxi services to

date, General Motors' ( GM ) Cruise and Alphabet's Waymo, logged

millions of miles with regulators under more restrictive permits

before getting approval to pick up passengers. (Cruise has since

halted robotaxi operations).

On a January 29 earnings call, Musk said he expects to

release an "unsupervised" version of its Full Self-Driving

system in California this year. The two California agencies that

regulate the industry told Reuters that Tesla has not applied

for required permits to operate driverless vehicles or carry

passengers and hasn't reported testing data to the state since

2019.

California has no specific standards for how much testing is

needed for approval, but other companies that have navigated the

process logged millions of autonomous-vehicle testing miles

under state oversight. Tesla has logged just 562 testing miles

since 2016, state records show.

'THE CHALLENGE WITH ELON'

Musk made his latest robotaxi promises the same day Tesla

reported disappointing earnings, which missed analysts'

expectations and followed earlier news that Tesla posted its

first-ever sales decline in 2024. Shares rose 3% the following

day.

He promised Tesla would launch "autonomous ride-hailing for

money in Austin, in June." Musk did not say how many cars, how

customers would access them or whether the service would be

available to everyone.

The rollout of "unsupervised" FSD in California and "many

regions of the country" would follow later this year, Musk said,

without explaining whether that meant driverless-taxi services,

a feature Tesla owners could buy, or some other offering.

Musk did say "unsupervised" FSD would be capable of driving

with "no one in the car."

Such comments often leave investors guessing what Tesla will

actually deliver, and when, said Brian Mulberry, client

portfolio manager at Zacks Investment Management, a Tesla

investor.

"This is the challenge with Elon: You're kind of reading through

the tea leaves here and trying to extrapolate from some

fragments what might actually happen," he said. Mulberry added

that he wasn't particularly concerned about the specifics of

Musk's promises and timelines this year, provided Tesla shows

progress: "The blueprint, I think, is there."

Bryant Walker Smith, a University of South Carolina law

professor focused on autonomous driving, said Texas requires no

"pre-market approval" before Tesla can deploy driverless

vehicles. Yet he doubted Tesla would attempt any broad

deployment of autonomous technology - in Texas or anywhere -

after what he called its underwhelming demonstration of a

robotaxi concept, the Cybercab, last October on a Los

Angeles-area movie-studio lot.

"Tesla is not going to flip a switch and suddenly make all

of their cars capable of driving by themselves, anywhere, under

any conditions," he said.

Smith said the company might more likely attempt a

small-scale test of its technology, possibly in limited areas of

Austin in good weather, or with humans able to intervene by

remote control to prevent crashes. "There are ways one could

probably make that work," he said.

'WE HAVE NO POWER'

Autonomous vehicle testing and operation is allowed on Texas

roads "as long as they meet the same safety and insurance

requirements as every other vehicle on the road," said Adam

Hammons, a spokesperson for the state Department of

Transportation.

Austin has seen a surge in driverless vehicles on its

streets over the last two years, which has led to resident and

government concerns after a series of near-miss incidents

involving pedestrians, cyclists and other vehicles. In 2023, a

group of more than 20 Cruise robotaxis caused a traffic jam near

the University of Texas campus, blocking the street as they

struggled to navigate around one another.

GM declined to comment.

The city has logged 78 formal complaints from law

enforcement, emergency responders and residents since July 2023,

which officials say may not capture all incidents involving the

vehicles. One resident complaint from December described a Waymo

vehicle blocking a lane of traffic for half an hour, causing "at

least three very close call accidents."

The complaint added: "I can't believe that y'all are

allowing potentially deadly technology to be tested on the

citizens of this city."

A Waymo spokesperson said the company has worked with local

leaders and first responders to "earn the trust of Austin's

communities" and is constantly working to improve its service.

Police have run into problems where driverless vehicles

don't respond to hand signals from officers directing traffic,

and the city has been unable to issue tickets to the vehicles,

according to a spokesperson for Austin's Transportation and

Public Works department. The city recently came up with a way to

submit complaints in municipal court when officers observe

traffic violations.

Tesla reached out to Austin officials last May, and city

officials provided information about local fire and police

procedures, maps of schools and school zones, and traffic rules

during special events, the spokesperson said.

Austin City Council member Zo Qadri, who represents downtown

areas frequented by robotaxis, said he's frustrated the city

can't impose rules on "private companies using these public

roads as a testing ground."

"Ultimately," he said, "we have no power."