Teslas Cybercab Faces Regulatory Hurdles, Potentially Derailing Mass Production Plans

Teslas Cybercab Faces Regulatory Hurdles, Potentially Derailing Mass Production PlansOn October 16, Tesla CEO Elon Musk promised to mass produce the Cybercab, an autonomous taxi prototype the company unveiled last week. However, this plan faces a major obstacle: current US regulations prohibit vehicles without steering wheels or other controls from being driven on public roads

Teslas Cybercab Faces Regulatory Hurdles, Potentially Derailing Mass Production Plans

On October 16, Tesla CEO Elon Musk promised to mass produce the Cybercab, an autonomous taxi prototype the company unveiled last week. However, this plan faces a major obstacle: current US regulations prohibit vehicles without steering wheels or other controls from being driven on public roads.

Tesla would require special authorization from the National Highway Traffic Safety Administration (NHTSA) to deploy vehicles on public roads that lack steering wheels or other controls mandated by US vehicle safety regulations. This process is extremely rigorous and challenging. Even if Tesla were to overcome this hurdle, it would only be allowed to deploy a few thousand self-driving taxis per year, far from its "mass production" vision, effectively limiting the Cybercab's potential as a mainstream product.

Bryant Walker Smith, a law professor at the University of South Carolina and an expert on autonomous vehicles, notes that exemptions are not a viable option for mass manufacturers unless Congress raises that limit. Although several bills related to this issue have failed to pass, the reality is that even if Tesla obtains NHTSA authorization, it can only produce a limited number of Cybercabs per year, falling short of its "mass production" goal.

Musk avoided addressing numerous issues, including regulatory obstacles, at the high-profile autonomous taxi launch. The vehicle is considered a cornerstone of his push for robotics and artificial intelligence. NHTSA has long permitted manufacturers to deploy 2,500 vehicles per year with exemptions, a negligible number for Tesla, which sold nearly 500,000 vehicles last quarter, barely meeting its market demand. This low quota starkly contrasts with Musks promise to investors last week of "mass producing autonomous taxis."

Last week, Musk announced that Tesla will allow Model Y and Model 3 owners in Texas and California to drive using its Autopilot system unsupervised starting next year. He then revealed that Tesla anticipates starting Cybercab production in 2026, although he admitted to being "a little optimistic" about the timeline. However, the product launch didn't clarify how Tesla plans to transition from selling advanced driver assistance features to fully autonomous vehicles, nor did it explain whether Tesla would personally run the Cybercab fleet. Taking the path from advanced driver assistance systems to fully autonomous driving presents numerous uncertainties.

In early 2022, General Motors sought an exemption from NHTSA through its Cruise self-driving unit to launch an autonomous vehicle devoid of steering wheels and other human controls. However, the automaker abandoned the initiative in July after NHTSA failed to respond to the request for over two years. NHTSA stated Tuesday afternoon that Tesla has not yet applied for an exemption for the Cybercab. To date, the agency has only approved one such application in 2020, allowing startup Nuro to deploy low-speed autonomous delivery vehicles specifically designed for cargo transportation, not passengers. Tesla did not respond to a request for comment on its plans to seek regulatory approval.

Individual states have jurisdiction over the vehicles driven on their roads and may impose their own obstacles. For example, despite Tesla's former headquarters being in California, where autonomous driving startups like Alphabet's Waymo and General Motors' Cruise have deployed self-driving taxis, Tesla has not applied for autonomous driving testing or vehicle deployment permits in California, a stark contrast to other autonomous driving startups. A spokesperson for the California Department of Motor Vehicles revealed that although Tesla has held permits to test autonomous driving technology under the supervision of a human safety driver since 2015, the company hasn't reported using the technology since 2019.

"I think the bigger challenge is going to be the state permitting process, noted Mary Cummings, a professor of engineering at George Mason University and a former NHTSA advisor. Cummings, a vocal critic of Tesla's Autopilot driver assistance feature, predicts that "it's going to be years before they get the necessary permits in California" before Tesla submits testing data to the state. Other states, however, have more relaxed policies. Texas, where Tesla is currently headquartered, has no unique permitting or registration requirements for autonomous vehicles, according to its Department of Motor Vehicles.

Law professor Smith believes that Tesla's most significant problem lies in the fundamental technological challenge: developing safe autonomous driving technology. He points out that Tesla has "been claiming for a decade" that it would deliver vehicles capable of full autonomy, but it hasn't yet achieved this goal, and the promise has been repeatedly broken. "The reason Tesla is facing these immediate regulatory hurdles is because they haven't, and can't, demonstrate a system that's safe enough," he adds.