Tesla in talks to bring the Robotaxi to city streets as it embarks on FSD regulatory approval process

After getting certified by Chinese authorities as a secure personal information broker, Tesla has now been granted a license to operate data centers and provide online processing as well as content distribution networks. This is key to fulfil the Chinese government's requirements that all the data that Tesla collects from its citizens, like its eventual Full Self-Driving service analytics, stays local and secure.

Tesla is now running pilot FSD testing with Model Y vehicles in China, and will have to present the results before regulators there to convince them to approve FSD for use in the world's biggest car market. China wants to show that it is not against such services provided by foreign companies, and local officials have been on record saying that Tesla's driver-assist options will only serve to enrich the autonomous driving experience in the country as companies learn from each other and users warm up to the idea.

Local competitors like Xpeng also say that bringing Tesla FSD to China will be a mutually beneficial endeavor, but Xpeng has a big head start as it will become the first local company to have a self-driving option approved for use in major cities there this quarter, thanks to its new P7+ sedan. Tesla's FSD approval in China, on the other hand, will only happen next year at the earliest.

Still, Tesla is doing what it can to fulfil all the regulatory requirements in China as well as in the US, where it is determined to launch unsupervised FSD next year in Texas and California, as well as gain Robotaxi permit in 2026.

It is now asking the local Palo Alto government to use its city streets as a testing ground for the Robotaxi launch. According to the city's spokesperson Meghan Horrigan-Taylor, Palo Alto is in discussion with Tesla about such Robotaxi testing partnership.

Tesla's regulatory move makes perfect sense, as it opened its new global engineering and AI headquarters in Palo Alto just last year, and a permit to use regular city streets for testing of its driverless Robotaxi there would be rather convenient.

The city, on the other hand, will benefit as its Palo Alto Link service that provides a free or affordable ride-share option to the community is facing funding challenges. At the Robotaxi unveiling, Elon Musk said that its rides will cost as low as $0.30 per mile with all expenses factored in, so a test fleet of Robotaxis would be pretty enticing for the Palo Alto city council.

Its spokesperson, however, notes that it will ultimately be up to the California Public Utilities Commission and the California Department of Motor Vehicles to "assess the safety and readiness of autonomous vehicles for public roads," so Tesla will still have some regulatory convincing to do to make the Robotaxi street legal in Palo Alto.

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