Tesla launches Cybercab as driverless ambitions face regulatory test

Tesla has begun commercialising its long-promised Cybercab robotaxi in Austin, Texas, taking another step towards its ambition of turning autonomous driving into a major part of its business. The electric vehicle maker began offering limited rides in the two-seater Cybercab on September 3, which marks the first commercial deployment of a vehicle designed specifically for autonomous ride-hailing. Unlike conventional cars, the Cybercab has no steering wheel, accelerator or brake pedals. Tesla is positioning the vehicle as a purpose-built autonomous taxi that can operate without a human driver. The launch, however, has immediately raised questions about regulation and safety. On September 4, the US National Highway Traffic Safety Administration (NHTSA) opened an audit into Tesla's self-certification of the Cybercab. The agency said it would examine the technical data and processes Tesla relied on to determine that the vehicle complies with federal motor vehicle safety standards. NHTSA's inquiry is focused on the absence of conventional manual controls, including the steering wheel, brake pedal, accelerator and mirrors. Tesla had told the regulator that it had certified the Cybercab as compliant with applicable Federal Motor Vehicle Safety Standards. NHTSA, however, said existing safety standards remain in force while the agency works on proposed changes relating to autonomous vehicles. Tesla's robotaxi bet The Cybercab is central to Tesla's CEO, Elon Musk's strategy for expanding the company beyond electric vehicles and into autonomous transportation. Musk has repeatedly argued that self-driving technology could transform Tesla's economics by allowing its vehicles to generate revenue as robotaxis rather than being used only by their owners. The company has already been operating a limited robotaxi service using autonomous Model Y vehicles in parts of the United States. The Cybercab is expected to eventually become the main vehicle in that network. Tesla's rollout, however, has been slower than Musk's earlier projections. Related News As of September 3, Texas records showed 420 Tesla autonomous vehicles registered in the state, including 45 Cybercabs. By comparison, Alphabet's Waymo had 988 autonomous vehicles registered in Texas, according to Reuters. The gap highlights the challenge Tesla faces as it attempts to catch up in a market where competitors have already accumulated significant experience operating driverless vehicles commercially. A test for the robotaxi market The Cybercab launch represents more than the arrival of another Tesla model as it is also a test of whether purpose-built autonomous vehicles can move from controlled demonstrations to commercially viable transportation services at scale. For Tesla, the opportunity has potential because a fleet of autonomous vehicles could allow the company to generate recurring revenue from transportation services while reducing its reliance on conventional vehicle sales. Scaling the model will depend on more than manufacturing. Regulatory approval, safety performance, consumer confidence and the ability of autonomous vehicles to operate reliably across different road and weather conditions will determine how quickly Tesla can expand the service. The company is also entering a market where Waymo has established an early lead in commercial robotaxis. Tesla's decision to launch the Cybercab despite immediate regulatory scrutiny could become an important moment for the wider autonomous vehicle industry. If regulators accept Tesla's approach, it could help increase the development of vehicles designed without traditional driving controls. If the company is required to make significant changes, however, the regulatory process could slow Tesla's plans to scale its robotaxi network. For now, the Cybercab has moved from Tesla's futuristic demonstrations to real-world commercial operation. The next challenge is proving that its vision of driverless transportation can work safely, consistently and profitably at scale. Read Next Huawei, Apple, Xiaomi intensify foldable smartphone battle Join BusinessDay whatsapp Channel, to stay up to date Open In Whatsapp