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Tesla a step closer to ride-hailing with California permit

Tesla a step closer to ride-hailing with California permit

  • 18.03.2025 23:19
  • businesstimes.com.sg
  • Keywords: dangerous, dangerous

Tesla was granted a California permit allowing it to transport passengers in company-owned vehicles, initially for employees before expanding to the public. This move positions Tesla to compete with ride-hailing companies like Uber and Lyft but does not currently permit autonomous vehicle rides.

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The company is facing a significant sales slump thanks to its ageing lineup and a growing backlash to Musk’s close affiliation with US President Donald Trump.

Context

Tesla’s Approval for Passenger Transport in California

  • Permit Details:

    • Tesla was granted a transportation charter-party carrier permit by the California Public Utilities Commission on March 18, 2025.
    • The permit allows Tesla to initially transport employees in company-owned vehicles on a prearranged basis, with plans to later offer services to the public.

  • Ride-Hailing Ambitions:

    • Tesla aims to launch ride-hailing services, competing with companies like Uber, Lyft, and Waymo.
    • Elon Musk previously announced plans to roll out driverless ride-hailing in Austin by June 2025 and in California by the end of the year.

  • Competitive Dynamics:

    • Tesla’s move positions it directly against traditional ride-hailing platforms.
    • The new permit is distinct from those used by ride-hailing companies, which rely on smartphone apps for service delivery.

  • Market Implications:

    • Tesla’s entry into ride-hailing could disrupt the transportation sector and create a new revenue stream.
    • The approval does not currently allow autonomous vehicle operations, limiting Tesla’s immediate capabilities in this space.

  • Stock Reaction:

    • Tesla shares rose 0.4% in New York trading after the permit announcement.

  • Strategic Considerations:

    • Tesla is betting heavily on autonomous driving, robotics, and AI to diversify beyond its core EV business, which is currently struggling due to an ageing product lineup and negative consumer sentiment tied to Elon Musk’s association with former President Donald Trump.

  • Regulatory Environment:

    • The permit approval highlights regulatory progress for Tesla but underscores the need for further developments in autonomous vehicle regulations.