In a bold and potentially transformative statement during Tesla’s Q2 2025 earnings call, CEO Elon Musk revealed the company is actively gaining regulatory approvals for its long-promised autonomous ride-hailing service. With several states already preparing for launch, Tesla (TSLA) is now targeting coverage for nearly half of the U.S. population by the end of the year.

Key Announcements from the Earnings Call

Tesla has been working behind the scenes with regulators in a growing number of jurisdictions. According to Musk, “We are getting the regulatory permission to launch in the Bay Area, Nevada, Arizona, Florida, and a number of other places.” 

This marks a significant milestone in Tesla’s full self-driving (FSD) ambitions, which have faced both technical and regulatory hurdles in recent years. The expansion is not just limited to these states; Musk also hinted at a much broader plan in motion. 

“As we get the approvals and prove out safety, we will be launching the autonomous ride-hailing across most of the country. I think we will probably have autonomous ride-hailing in probably half the population of the US by the end of the year,” the Tesla CEO said. 

Hyper-Exponential Growth Ahead

While previous autonomous vehicle (AV) timelines from Tesla have often drawn skepticism due to repeated delays, this time around, the company appears to be proceeding with a measured approach. Musk emphasized safety and regulatory compliance as top priorities, even while projecting aggressive scaling: “That’s at least our goal, subject to regulatory approvals. I think we will technically be able to do it. Assuming we have regulatory approvals, it’s probably addressing half the population of the US by the end of the year.”

He continued, “We are being very cautious. We do not want to take any chances, so we are going to go cautiously. But the service areas and the number of vehicles in operation will increase at a hyper-exponential rate.”

This phrasing — “hyper-exponential” — suggests that Tesla anticipates both rapid uptake and compounding deployment as more locations come online and as more users experience and adopt the service.

What This Means for Tesla and the Industry

If successful, Tesla's autonomous ride-hailing network could reshape urban transportation, challenge existing players like Uber (UBER) and Lyft (LYFT), and redefine the economics of mobility. Tesla plans to use its own fleet of Robotaxis and potentially allow individual owners to enroll their vehicles in the network.

The economic implications for Tesla could be profound. Autonomous ride-hailing has long been a pillar of Musk’s vision for the company’s future profitability, especially as EV sales growth begins to mature globally. The service could create a recurring revenue stream and drastically increase vehicle utilization rates.

Moreover, this move could place Tesla ahead of other companies in the race to scale driverless technology — such as Alphabet’s (GOOGL) (GOOG) Waymo and Amazon’s (AMZN) Zoox — which have also encountered regulatory and operational speed bumps in their expansion efforts.

Cautious Optimism or Overreach?

Despite the optimism, challenges remain. Tesla must not only prove the safety of its FSD technology to regulators, but also gain public trust — a task made more complex by past incidents involving Autopilot and FSD beta software.

Still, Musk’s comments indicate that Tesla believes it has reached the point of technical readiness. Now, the key variable is government approval, which will vary by state and could delay broader adoption.

What This Means For Investors

If Tesla delivers on its timeline, the back half of 2025 could mark the dawn of a new era in autonomous transport. With regulatory green lights now emerging and a clear roadmap from Musk, Tesla’s robotaxi ambitions may finally be crossing from speculation into reality.

As always with Tesla, execution will be key — but the roadmap is becoming clearer than ever. While Musk is notorious for missing deadlines, investors already seem to be pricing this reality into the stock, with Tesla teetering around the $1 trillion mark. However, given such a lofty goal, half the country in four to five months seems unlikely; but considering Tesla’s influence and reach, winning major markets across more key states seems achievable. 

Regardless of whether Tesla meets Musk’s lofty goal by the end of the year, it will prove to be an astronomically valuable business line. Given the substantial progress already made, there’s certainly more upside to be had as the rollout comes to fruition. As Musk said himself during the call, “We are not always on time, but we get it done.”