Tesla share price jumps 5% after Robotaxi permit approval in California
Tesla moves closer to robotaxi rollout with new California permit
Tesla shares rose nearly 5% on Wednesday following news that the company received approval for a key permit that brings it one step closer to launching robotaxi ride-hailing in California.
Key Takeaways
- The California Public Utilities Commission (CPUC) granted Tesla a transportation charter-party carrier permit (TCP), allowing the company to conduct supervised ride-hailing for its employees in California.
- To offer unsupervised rides or public services, Tesla will need to obtain a transportation network company (TNC) permit and meet additional regulatory requirements, including safety authorizations from the California DMV to test driverless vehicles.
- Cantor Fitzgerald analyst Andres Sheppard upgraded Tesla's stock from Neutral to Overweight, citing the company’s progress with autonomous ride-hailing and the upcoming rollouts of Full Self-Driving (FSD) in the U.S., China, and Europe as potential catalysts for stock growth.
Approval for Supervised Ride-Hailing in California
Tesla’s stock surged nearly 5% on Wednesday after the California Public Utilities Commission (CPUC) approved the company’s application for a transportation charter-party carrier permit (TCP), reports Yahoo Finance.
The permit grants Tesla the right to offer chartered and point-to-point hired trips in California, but only for supervised rides with employees. This is a crucial step forward for the company’s robotaxi ambitions, although the permit does not allow Tesla to offer public autonomous ride-hailing services just yet.
Currently, the TCP enables Tesla to perform supervised ride-hailing with employees but does not authorize any fully autonomous vehicles or public operations. Tesla would need to apply for a transportation network company (TNC) permit to provide ride-sharing services to the public.
Tesla Inc (TSLA) share price dynamics (Jan 2025 - Mar 2025) Source: TradingView
Additionally, Tesla must gain approval from the California Department of Motor Vehicles (DMV) for driverless rides before moving forward with unsupervised robotaxi operations.
Road to Unsupervised Robotaxi Services
For Tesla to fully realize its robotaxi ambitions, the company must overcome several regulatory hurdles. Beyond obtaining a TNC permit for ride-hailing, Tesla needs to engage in the CPUC’s Autonomous Vehicles (AV) Passenger Program to test autonomous rides, either with a driver or fully driverless.
At present, Tesla does not have the necessary DMV authorization to conduct driverless tests, which poses a significant barrier to the company’s autonomous future. Despite these challenges, CEO Elon Musk remains optimistic about the future of Tesla’s Full Self-Driving (FSD) technology.
The company is currently using its Model Y and Model 3 vehicles for autonomous testing but plans to launch its purpose-built robotaxi, the Cybercab, by 2026. The vehicle will feature no steering wheel or pedals and will be optimized for fully autonomous rides.
Bullish Upgrade Boosts Tesla’s Valuation
In addition to the robotaxi news, Tesla's stock got a boost from a bullish upgrade by Cantor Fitzgerald analyst Andres Sheppard. Following a recent visit to one of Tesla’s factories, Sheppard noted that the recent downturn in Tesla’s stock price presents an attractive entry point for investors.
Sheppard believes that Tesla’s efforts with autonomous ride-hailing, particularly in Austin, Texas, and the upcoming rollouts of Full Self-Driving (FSD) in China and Europe, could serve as key catalysts for growth. As a result, Sheppard upgraded Tesla's stock to Overweight from Neutral and maintained a price target of $425.
Tesla’s progress with its robotaxi permit in California, coupled with the bullish analyst upgrade, sparked a 5% surge in the company’s stock. While the road to fully autonomous ride-hailing is still challenging, Tesla’s continued advancements in self-driving technology and its upcoming vehicle launches have investors optimistic about the company’s long-term potential.
As we wrote, Uber CEO Dara Khosrowshahi expressed optimism about working with Tesla and Elon Musk as the company prepares to launch its robotaxi service.
