At Tesla's highly publicized robotaxis launch event last week, CEO Elon Musk announced that Tesla plans to introduce some Model 3 and Model Y vehicles in Texas and California in 2025. He said he expects to release an “unsupervised” version of FSD, the company's advanced driver assistance system.
He also said that by 2026 or 2027, Tesla will begin producing robotaxis, which are made without steering wheels or pedals.
The deployment of both unsupervised FSDs and robotaxis built without human control raises regulatory concerns, although there are skepticism about Musk's ability to stick to the schedule.
Let's break this down.
What exactly does “unsupervised FSD” mean?
FSD stands for “Full Self-Driving,” but the technology is not yet capable of fully autonomous driving. However, it can perform certain self-driving tasks in urban areas and on highways. The company changed FSD's brand from “FSD Beta” to “FSD Supervised” in April after being accused of false advertising due to an incorrect name. This name change more accurately reflects the fact that a human driver should still be behind the wheel and take over driving if necessary.
We believe that “unsupervised FSD” means one of two things. Either a Level 4 system that is completely driverless, or a “keep your hands, keep your eyes off'' Level 3 system, such as Mercedes' Drive Pilot or a system being developed by General Motors. (Level 4 is fully autonomous driving under predefined conditions, while Level 3 means a human driver will occasionally need to take over if the system requests it.)
What are the regulatory implications of unsupervised FSD?
Image credit: Whole Mars Catalog / YouTube
Tesla said it plans to launch an unsupervised version of its expensive software in California and Texas next year. Musk did not say whether this would be just an over-the-air update or whether customers would have to pay additional cash to get the more advanced technology.
Either way, Tesla could send software updates to its Model Y and Model 3 in Texas, where it is headquartered, next year with little regulatory oversight. Texas' self-driving vehicle regulations essentially allow companies to use human vehicles as long as the vehicle complies with traffic and motor vehicle laws, is equipped with a recording device, is registered, and is covered by auto liability insurance. It is permitted to install AVs with or without drivers.
But in 2025, the state Legislature could consider a bill that would require AV companies to notify the Texas Department of Transportation if a human driver exits the vehicle, among other things.
In California, the process is not as simple as the state DMV has several permits.
Tesla, along with more than 30 other companies, already has a driving test permit that allows it to test self-driving technology on public roads with safe drivers. A California DMV spokesperson told TechCrunch that Tesla has held this permit since 2015, and that the company last reported using it in 2019.
“Tesla does not have nor has applied for any driverless testing or deployment permits,” CA DMV information officer Chris Orlock told TechCrunch. “If Tesla plans to expand its permitted test vehicles in California, Tesla must identify the vehicles (year, make, model, etc.) to be tested and apply to have new vehicles added to the permit. You will also need to renew your driver's permission to conduct the test.
A “driverless test” permit allows companies to test self-driving cars on public roads without a driver in the front seat, and a “deployment permit” allows companies to commercially deploy self-driving cars. However, it is only allowed for activities that do not carry passengers, such as food delivery. .
If “unmonitored FSD” means Tesla plans to release a Level 3 system next year, all it would need to do is get a deployment permit. But if Waymo plans to roll out a Level 4 system like the one it currently operates in some cities (which industry experts tell TechCrunch is unlikely to happen before next year), the company could use unmanned You will need to apply for both a driving test and a deployment permit.
Before Tesla can enter the ride-hailing business and charge passengers, it will need another permit from the California Public Utilities Commission (CPUC). The agency has not confirmed whether Tesla has started the application process.
Mercedes is the only automaker licensed to operate the Level 3 Drive Pilot System in California, but there are strict conditions. Vehicles equipped with this software can only be driven on freeways and interstates (excluding surface roads) in the San Francisco Bay Area, Los Angeles, Sacramento, and San Diego. During the day, you can only drive at speeds of 60 miles per hour under sufficient weather conditions, i.e., no highway flooding or snowstorms. Basically, it's most useful when you're stuck in traffic on the freeway and want to use that time to check your email or scroll through Instagram.
Robotaxis may ignore federal safety standards
Image credit: Tesla
Additionally, Musk claims that Tesla will start producing robotaxis by 2027 at the latest. (Reminder: Musk claimed in 2019 that Tesla would have 1 million robotaxis on the road by 2020, and Musk claimed in 2022 that Tesla would have robotaxis in production by 2024.)
Regardless of whether Tesla meets this deadline by 2027, Federal Motor Vehicle Safety Standards (FMVSS) could delay the release of vehicles that currently lack steering wheels or pedals.
If Tesla wants to mass produce robotaxis without traditional driver controls, it will need to obtain an exemption from FMVSS.
NHTSA confirmed to TechCrunch that Tesla has not applied for any exemptions for the unmanned CyberCab.
So far, the National Highway Traffic Safety Administration (NHTSA) has granted only one such exemption for Nuro's production of its R2 low-speed autonomous delivery vehicle. This is because these vehicles are not designed to carry human passengers.
General Motors requested a waiver to mass produce the original Cruze in 2021, but the plan was later scrapped. Amazon's Zoox is also holding off on an exemption for robot taxis. Approval for testing has been obtained, but full-scale production has not been approved.
NHTSA was expected to announce new rulemaking in September 2023 addressing AVs manufactured without human controls or wipers, but the rulemaking has been delayed. The agency told TechCrunch it is working to publish the proposed rule “soon.”
Investors were spooked by the company's flashy plans because of this kind of thorny regulatory landscape, how Tesla plans to overcome such regulations, and how Tesla's FSD technology has advanced. Either that or Musk's lack of clarity on the details of the automaker's go-to-market strategy. Last week's event. Tesla stock fell nearly 10% on Friday and has yet to fully recover.
Tesla did not respond to a request for comment.