Amid declining revenues, Elon Musk-led electric vehicle powerhouse Tesla is planning to launch its autonomous vehicle-based robotaxi business this weekend in California, according to reports.
Just weeks ago, Audacy station KCBS Radio in the Bay Area reported that Musk said he planned to have the service up and running this month. Business Insider reported this week that Tesla told staff in a Thursday memo that it plans to launch the service this weekend in San Francisco.
During the first quarter of this year Tesla sales dropped by 13%. According to second quarter results released Wednesday, Tesla’s total revenue dropped 12% year-over-year to $22.5 billion. Per the company, a decline in vehicle deliveries, lower regulatory credit revenue and reduced vehicle average selling price contributed to the decline in sales.
Musk also notably became a high-profile ally of President Donald Trump while on the campaign trail last year and was even appointed to lead the Department of Government Efficiency (DOGE) this year, though the two men have since had a very public falling out. Drooping sales came as the Tesla CEO faced backlash for DOGE-led mass layoffs.
By this May, there were reports that the company board was considering finding a replacement for Musk, though its chair denied the claim. That month, Audacy reported that Tesla opened up trade-ins on Cybertrucks, with owners of the vehicles reporting massive losses in value after just one year. There were also reports of vandalism against Tesla vehicles.
According to the company, the second quarter of this year was “a seminal point in Tesla’s history: the beginning of our transition from leading the electric vehicle and renewable energy industries to also becoming a leader in AI, robotics and related services.” It went on to note that the first Tesla robotaxi service launched last month in Austin, Texas.
“While the service is limited in initial scope, we believe our approach to autonomy – a camera-only architecture with neural networks trained on data from our global fleet of millions of vehicles – allows us to continually improve safety, rapidly scale the network and improve profitability,” Tesla said.
Business Insider reported that Tesla said its timeline for the robotaxi launch in San Francisco was moved up so that the service could roll out as early as Friday. Per the memo cited by the outlet, some Tesla owners would be sent invites to use the service and users would pay for their robotaxi rides throughout a large swath of the Bay Area, including Marin, much of the East Bay, San Francisco and San Jose. Tesla built modified Model Ys at its factory in Austin for the launch with extra camera and telecommunications equipment.
“Earlier this month, Tesla shared a video showing its first fully autonomous delivery: a Tesla Model Y driving itself from the Austin factory to a customer’s house,” said Business Insider. “Tesla’s AI Director, Ashok Elluswamy, said on X that the car reached speeds of 72 miles per hour at one point.”
Although the foundation of the robotaxi service is autonomous vehicles that ostensibly don’t need drivers behind the wheel, Business Insider said that the Tesla service launch vehicles will have safety drivers. These drivers will be able to control the car using the steering wheel and brakes, according to the memo.
Tesla’s launch is not the first case of autonomous vehicles motoring through California streets. In 2023, Audacy reported that California’s Department of Motor Vehicles Tuesday announced an immediate suspension of deployment and driverless testing permits for Cruise LLC, a driverless taxi company, after its cars were implicated in dangerous incidents.
“A spokesperson for the California DMV said the agency recently met with Tesla, but the company has yet to apply for a permit for driverless testing or deployment. The agency did not respond to questions regarding whether Tesla would be required to have a permit to launch its commercial robotaxi service with a safety monitor in the driver’s seat,” said Business Insider’s report. It said Tesla does have a permit for testing its self-driving software in California with a driver behind the wheel, citing the California DMV’s website. As of last December, the outlet reported that there were 224 registered test drivers under the permit.
Furthermore, Business Insider said that while the California Public Utilities Commission granted Tesla a permit to provide a transportation service for employees, it had not applied for permits that would allow it to provide a commercial service to the public as of July 10.
“The CPUC did not immediately respond to a request for comment outside its normal working hours on Friday,” said Business Insider.
Eventually, Musk wants to expand the Tesla robotaxi service globally. Business Insider said he’s already seeking approvals in Florida and Arizona.
“We will further improve and expand the service (more vehicles covering a larger area, eventually without a safety rider) while testing in other U.S. cities in anticipation of additional launches,” the company said this week. “Our efforts to refine the Robotaxi offering in Austin are not location-specific and will allow us to scale to other cities quickly with marginal investment.”
It also said that its “purpose-built Robotaxi product – Cybercab,” is “scheduled for volume production,” starting next year.