Tesla has obtained a Transportation Network Company permit from the Arizona Department of Transportation to operate its robotaxi ride-hailing service in the state. The approval, granted on November 17, 2025, allows paid rides with human safety drivers but does not yet permit fully driverless operations. This marks a step toward expanding the service beyond Austin and the San Francisco Bay Area.
Tesla applied for the Transportation Network Company (TNC) permit on November 13, 2025, and received approval from the Arizona Department of Transportation (ADOT) on November 17, 2025. This permit authorizes the company to offer commercial ride-hailing services across the state, building on a separate September 2025 certification that allowed testing of autonomous vehicles with safety monitors. However, operations will require a human supervisor in the front seat, similar to Tesla's current setups in Austin, Texas, and the San Francisco Bay Area, where the service launched in June 2025 for Austin.
The robotaxi initiative remains supervised, as full driverless capability needs additional certification under Arizona's self-certification process and federal guidelines. In Austin, Tesla's vehicles have recorded four crashes in September 2025 and a total of seven since the program's start, though reports compare this favorably to the city's average of 24 daily crashes. Tesla CEO Elon Musk stated during the company's October 2025 earnings call that robotaxis would operate in eight to 10 metro areas by the end of 2025, with initial deployments geofenced to safe zones and remotely monitored, starting with about 10 vehicles before rapid expansion to cities like Los Angeles and San Antonio.
This approval positions Tesla to compete with Waymo, which has operated driverless rides in Phoenix since 2018 and now runs over 1,500 vehicles providing 250,000 weekly trips across Phoenix, San Francisco, Los Angeles, and Austin. Tesla plans further expansions to Nevada and Florida by year-end. The news contributed to a 0.6% rise in Tesla shares during premarket trading on November 19, 2025, though analysts maintain a Hold consensus with an average price target of $384.14, implying 4.67% downside from recent levels.
