Tesla Seeks California Ride-Hailing Permit Amid Declining EV Sales

Tesla Inc TSLA has applied for a transportation charter-party carrier permit in California, signaling its intent to enter the ride-hailing market, Bloomberg reports. This move could provide a crucial new revenue stream as Tesla faces declining EV sales, marking its first annual sales drop in over a decade.

What To Know: While CEO Elon Musk has long envisioned a fully autonomous ride-hailing fleet, the application suggests Tesla will initially use human drivers, per Bloomberg. The permit Tesla is pursuing mirrors the one held by Waymo – Alphabet's robotaxi unit – but Tesla has yet to apply for a permit to operate fully autonomous vehicles in California.

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If approved, Tesla's entry into ride-hailing could directly challenge Uber, Lyft and Waymo. Musk has promised to launch the service in Austin by June and expand to California by year-end, though specifics remain unclear.

What Else: Tesla's push into ride-hailing aligns with Musk's broader focus on AI and robotics, particularly as regulatory and technological hurdles continue to delay full autonomy.

Success in this space could help offset slowing car sales, but competition, regulatory challenges and the need for an effective ride-hailing infrastructure may complicate the rollout.

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