Only 2,500 vehicles are approved for road use in a year! Strict US laws hinder Musk's mass production of Robotaxi dream

Last week, Tesla CEO Elon Musk "painted a rosy picture" at the first Robotaxi business conference, announcing plans to produce a prototype Cybercab without a steering wheel and pedals starting in 2026, with very high production volumes by 2027.

Unfortunately, dreams must face the harsh reality. In order to mass-produce Cybercab, Tesla will have to overcome a major obstacle posed by U.S. government regulations. According to Bloomberg, if the produced vehicles lack a steering wheel or other control devices required by U.S. automotive safety regulations, automakers must first obtain approval from the National Highway Traffic Safety Administration (NHTSA) before these vehicles can hit the road. Even if Tesla manages to overcome this hurdle, only a few thousand autonomous taxis can be put on the road each year.

In cases where automakers are granted exemptions, NHTSA typically allows 2,500 vehicles to be deployed each year. This means that even if Cybercab hits the road, it will ultimately be a niche product. After all, Tesla delivered approximately 1.81 million vehicles globally last year, with a reported delivery volume of around 463,000 vehicles in the first month of this quarter. Based on these figures, the potential sales volume for the Robotaxi business after production may be negligible within Tesla.

On Tuesday, October 15th, the NHTSA stated that Tesla has not yet applied for an exemption for Cybercab to operate on the road. So far, NHTSA has only approved a similar application in 2020, allowing the startup company Nuro to deploy low-speed autonomous delivery vehicles for both freight and passenger transport.

In addition to strict NHTSA approval, regulations on vehicle road operations in various U.S. states also pose obstacles for Tesla. In Tesla's home state of California, Google's sister company Waymo and General Motors' autonomous driving subsidiary Cruise have already deployed autonomous taxis locally. However, Tesla has not applied for the necessary permits for autonomous driving testing or deployment in the state.

A spokesperson for the California Department of Motor Vehicles stated that since 2015, Tesla has held a permit to test autonomous driving technology with a human safety driver present, but the company has not reported using this technology since 2019.

Mary Cummings, an engineering professor at George Mason University and former NHTSA advisor, commented that for Tesla, obtaining state permits is a bigger issue. Before providing testing data to California, Tesla "will need several more years to obtain the necessary permits in California."

Following the Robotaxi Day conference last week, Wall Street News cited some media comments, stating that when people came back to their senses from the excitement, they realized that Tesla had only delivered an empty promise"Musk 'provided almost no new details on Tesla's self-driving taxi business model, such as revenue or market size forecasts.'"

Some comments pointed out that Musk avoided regulatory issues during the conference.

"Musk did not elaborate on how Tesla will address regulatory barriers to the deployment of self-driving cars, only stating that the company will offer the service where permitted. Due to some accidents involving autonomous vehicles, regulatory authorities have conducted stricter reviews of related companies."

Other comments mentioned that the conference "did not have much discussion on how the company will invest in the service, regulatory obstacles it faces, and details on how it plans to overcome them."