(Reuters) -Tesla is preparing to roll out its robotaxi service in San Francisco and the Bay Area with a safety driver as soon as this weekend, Business Insider reported on Friday, in an effort to expand quickly amid falling electric vehicle sales.
Shares in Tesla were up nearly 5% in late morning trade on Friday.
Success of the robotaxi business is critical for Tesla as CEO Elon Musk has warned of a few rough quarters due to unfavorable EV policy before revenue from the service and its self-driving software starts making a difference late next year.
Last month, the company launched a small test of the robotaxi service in Austin, Texas, with about a dozen of its Model Y SUVs, a few invited passengers and human safety monitors in front passenger seats. Musk during the company’s earnings call on Wednesday did not disclose when the safety monitors, a significant cost for Tesla, will be taken out.
Instead, the planned robotaxis in the Bay Area will have humans in the driver’s seat who will be able to control the car using the steering wheel and brakes, the report said, citing an internal staff memo.
The robotaxi service will ferry some invited Tesla owners, who will pay a fee, in a restricted area covering a large swath of the Bay Area, including Marin, much of the East Bay, San Francisco and stretching south to San Jose, it added.
Earlier this month, Musk had said Tesla will expand to the Bay Area “in a month or two,” depending on regulatory approvals.
California regulators, who did not respond to requests for comment on Friday, said on Wednesday Tesla had not yet applied for permits needed to pick up and charge passengers for rides in fully autonomous vehicles.
CEO Elon Musk has shifted Tesla’s focus toward robots and self-driving taxis as sales of its aging EV lineup have plummeted. Much of Tesla’s trillion-dollar valuation hangs on that bet.
Separately, The Information reported Tesla is well behind the pace necessary to meet Musk’s goal of producing at least 5,000 of its Optimus humanoid robots this year, having made only a few hundred of them.
Reuters could not independently verify the Business Insider and Information reports, while Tesla did not immediately respond to requests for comment on the reports.
During the earnings call this week, Musk said Tesla is getting regulatory permission to launch robotaxis in several states, including California, Nevada, Arizona and Florida.
Companies need a series of permits from the California Department of Motor Vehicles and the California Public Utilities Commission to test and deploy autonomous vehicles in the state.
Regulatory hurdles pose a challenge to Tesla as it must gain the trust of safety officials before launching fully autonomous services.
(Reporting by Zaheer Kachwala in Bengaluru and Abhirup Roy in San Francisco; Additional reporting by Harshita Mary Varghese; Editing by Tasim Zahid, Arun Koyyur and Chris Reese)
