Elon Musk says he is 'paranoid' about this issue; he's right to be

Tesla has a big summer ahead.

May 26, 2025 - 15:22

Elon Musk says he is 'paranoid' about this issue; he's right to be

Tesla (TSLA) has been preparing for this moment for years.

Since CEO Elon Musk first mentioned robotaxis in 2016, fans of the electric vehicle brand have been waiting for the ability to earn passive income by using their cars as autonomous cabs.

Tesla's Full Self-Driving feature is a state-of-the-art driver assistance feature that has been allowing drivers to travel billions of miles hands-free for years.

Earlier this year, Tesla said that its FSD system has driven a cumulative total of 3.6 billion miles, nearly triple the 1.3 billion cumulative miles it reported a year ago.

But despite the program's sustained success, Musk recently admitted that he is “extremely paranoid “ about the robotaxi launch scheduled for Austin this summer.

While Tesla recently killed its Cybercab concept, the company plans to test Model Ys already on the road as part of its robotaxi program.

”It’s prudent for us to start with a small number, confirm that things are going well, and then scale it up,” Musk told CNBC's David Faber.

Tesla plans to start off with just 10 robotaxis and then go from there. But even if Tesla pulls off that test run without any issues, expansion will be difficult.

Autonomous Teslas will be on the streets of Austin in weeks.
Image source: van der Wal/Getty Images

Tesla robotaxi expansion plan has numerous roadblocks

Once it proves its concept in Austin, Tesla plans to expand the robotaxi program to Los Angeles and San Francisco soon after.

California was Tesla's old stomping grounds before Musk moved the company's HQ to Austin in 2021 due to what he said were arduous regulatory practices, which may have to do with the company's operation during the Covid pandemic.

With Tesla's plan to expand in the state, Musk will be heading back into that regulatory environment, except now the rules governing autonomous driving are much stricter.

In April, the California Department of Motor Vehicles announced that it is seeking public comment on proposed regulations for self-driving vehicles.

The agency told CNBC that it wants California to "offer the nation’s most comprehensive rules for the operation of autonomous vehicles and underscore the DMV’s commitment to enhancing public safety, fostering innovation, and establishing a robust framework for AV technology testing and deployment.”

The new rules would require companies like Tesla to obtain a permit for testing with a human safety driver on board and complete a certain number of test-drive hours. They would then need to obtain a different permit for driverless vehicles.

Citizens have until June 9 to submit their comments to the DMV before it schedules a public hearing.

More Tesla news:

In October, California Governor Gavin Newsom signed Assembly Bill 1777 into law, giving the California DMV more leeway to adjust operational permits and allowing law enforcement to cite autonomous vehicle companies for noncompliance if there is an issue on the roads.

Tesla Full Self-Driving has a checkered past in California

When Musk and Tesla left California, it wasn't on the best of terms.

Of course, the company still operates its original facility in Fremont, California. But while Musk was moving Tesla's official headquarters, he took many shots at the state and its government.

The California DMV is already very familiar with Tesla and its Full Self-Driving technology.

In 2022, the DMV made an official inquiry into Tesla's FSD marketing, with their main issue being Tesla's use of the term “Autopilot” to describe the software. Tesla fought for years to keep the case out of court, but a judge in 2024 ruled that the case could go forward.

Tesla now says in its advertising that Autopilot and FSD require supervision.

Between his public spats with Newsom, his history with the California DMV, and the state's new stricter regulations on autonomous driving, Musk and Tesla have a lot of work to do to make their expansion dreams a reality.