Tesla and other companies are actively developing self-driving technologies and driverless ride-hailing platforms, and with President-elect Donald Trump’s transition team already focused on autonomous vehicles, the tech is highly expected to be a major theme in 2025.
According to a Reuters Breakingviews prediction report on Monday, Trump’s moves to minimize regulations surrounding autonomous vehicles and create a federal framework for the technology are expected to supercharge the industry—as increased competition emerges in the U.S. and beyond.
With Tesla CEO Elon Musk also set to play a large role in Trump’s administration, heading up the Department of Government Efficiency (DOGE), the company’s own developments in the sector could also stand to benefit substantially. Reuters also predicts that self-driving pilots could expand under the administration, especially as developers aim to increase the amount of data used to train their systems.
READ MORE ON SELF-DRIVING REGULATIONS: U.S. agency proposes rules for self-driving vehicle incident reporting
Last month, the Trump transition team said that it was already aiming to create a federal self-driving vehicle framework. Additionally, the team earlier this month was reported to be ditching federal requirements on automated driving tech crash reporting, coming as one example of the administration’s aims to streamline regulatory processes in the industry.
Internationally, the Society of Automotive Engineers (SAE) categorizes vehicle automation into five automation levels, which are generally adopted in conversations about robotaxis in the U.S. market as well. You can see these categories below, with Level 3 and above generally considered to be full automation, at least at times, while Level 2 and below are considered partial automation.
Credit: SAE International
According to the data firm Canalys, just 5.5 percent of vehicles sold this year have included Level 2 or more assistance features, such as cruise control and automated lane changes. By 2025, however, Citi research has suggested that models in China below 200,000 yuan (about $28,000) will have these features, playing a major role in consumer demand.
In China, at least 19 companies are currently testing fully autonomous vehicles, and Goldman Sachs expects the country to see as many as 90 percent of consumer sales to have features of Level 3 autonomy or greaterby 2040, compared to just 65 percent in the U.S.
While these technologies are emerging, McKinsey predicts that self-driving could become a $400 billion industry by 2035. Google parent company Alphabet runs Waymo, a Level 4 driverless ride-hailing service that already offers paid rides, while others, including Pony AI and Baidu also offer rentable self-driving vehicles in select areas.
BYD has invested $14 billion into self-driving, Toyota has around 1.7 trillion yen ($11.3 billion) going toward software, while Volkswagen has invested $700 million into China’s Xpeng Motors. Li Auto and Xiami are also considered potential competitors in these spaces, and 2025 could prove a big year for commercial self-driving hopefuls.
Tesla’s Supervised FSD program, Cybercab unveiled
Meanwhile, Tesla isn’t yet operating a paid ride-hailing service, though it gathers data through owner use of its Supervised Full Self-Driving (FSD) software. Tesla has touted the potential scalability of its Supervised FSD in the past, given that it’s available at least in some form in all of the company’s vehicles.
Musk has also regularly talked about a future in which owners of its vehicles could use an Unsupervised FSD to generate money by giving robotaxi rides while not normally in use.
On that theme, Tesla unveiled the Cybercab in October, a fully autonomous, two-seat vehicle with no pedals, set to eventually make it to the market as a driverless ride-hailing vehicle. It’s also set to be equipped with wireless charging and make use of an automated cleaning robot, offering top-to-bottom autonomy for owners.
MORE ON FSD SUPERVISED: Watch Tesla’s FSD v13.2 navigate away from park in a tricky situation
Tesla skeptics, Waymo’s driverless ride-hails, GM’s Cruise drives into the sunset
Despite the unveiling, some have shared skepticism around how long the vehicles could take to reach the market, especially given that production isn’t set to begin until 2026 with commercial deliveries aiming for “before 2027,” according to Musk during the October 10 “We, Robot” unveiling event.
On Monday, analyst Gary Black also predicted that fewer than 50 percent of Tesla owners would join the company’s robotaxi fleet, while a Guggenheim researcher in October said Tesla was “extremely unlikely” to reveal a credible path to robotaxi commercialization in the next 12 to 24 months.
Others like Waymo are some of the first companies operating paid driverless ride-hails, and the Google-run firm said in August that its robotaxis were already giving 100,000 paid self-driving rides per week. Meanwhile, General Motors (GM) announced this month that it will officially end funding for its commercial self-driving arm Cruise, after one of the company’s driverless vehicles last year ran over and pinned a pedestrian in San Francisco.
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Tesla (TSLA) receives “Buy” rating and $551 PT from Canaccord Genuity
He also maintained a “Buy” rating for TSLA stock over the company’s improving long-term outlook, which is driven by autonomy and robotics.
Canaccord Genuity analyst George Gianarikas raised his Tesla (NASDAQ:TSLA) price target from $482 to $551. He also maintained a “Buy” rating for TSLA stock over the company’s improving long-term outlook, which is driven by autonomy and robotics.
The analyst’s updated note
Gianarikas lowered his 4Q25 delivery estimates but pointed to several positive factors in the Tesla story. He noted that EV adoption in emerging markets is gaining pace, and progress in FSD and the Robotaxi rollout in 2026 represent major upside drivers. Further progress in the Optimus program next year could also add more momentum for the electric vehicle maker.
“Overall, yes, 4Q25 delivery expectations are being revised lower. However, the reset in the US EV market is laying the groundwork for a more durable and attractive long-term demand environment.
“At the same time, EV penetration in emerging markets is accelerating, reinforcing Tesla’s potential multi‑year growth runway beyond the US. Global progress in FSD and the anticipated rollout of a larger robotaxi fleet in 2026 are increasingly important components of the Tesla equity story and could provide sentiment tailwinds,” the analyst wrote.
Tesla’s busy 2026
The upcoming year would be a busy one for Tesla, considering the company’s plans and targets. The autonomous two-seat Cybercab has been confirmed to start production sometime in Q2 2026, as per Elon Musk during the 2025 Annual Shareholder Meeting.
Apart from this, Tesla is also expected to unveil the next-generation Roadster on April 1, 2026. Tesla is also expected to start high-volume production of the Tesla Semi in Nevada next year.
Apart from vehicle launches, Tesla has expressed its intentions to significantly ramp the rollout of FSD to several regions worldwide, such as Europe. Plans are also underway to launch more Robotaxi networks in several more key areas across the United States.
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Waymo sues Santa Monica over order to halt overnight charging sessions
In its complaint, Waymo argued that its self-driving cars’ operations do not constitute a public nuisance, and compliance with the city’s order would cause the company irreparable harm.
Waymo has filed a lawsuit against the City of Santa Monica in Los Angeles County Superior Court, seeking to block an order that requires the company to cease overnight charging at two facilities.
In its complaint, Waymo argued that its self-driving cars’ operations do not constitute a public nuisance, and compliance with the city’s order would cause the company irreparable harm.
Nuisance claims
As noted in a report from the Los Angeles Times, Waymo’s two charging sites at Euclid Street and Broadway have operated for about a year, supporting the company’s growing fleet with round-the-clock activity. Unfortunately, this has also resulted in residents in the area reportedly being unable to sleep due to incessant beeping from self-driving taxis that are moving in and out of the charging stations around the clock.
Frustrated residents have protested against the Waymos by blocking the vehicles’ paths, placing cones, and “stacking” cars to create backups. This has also resulted in multiple calls to the police.
Last month, the city issued an order to Waymo and its charging partner, Voltera, to cease overnight operations at the charging locations, stating that the self-driving vehicles’ activities at night were a public nuisance. A December 15 meeting yielded no agreement on mitigations like software rerouting. Waymo proposed changes, but the city reportedly insisted that nothing would satisfy the irate residents.
“We are disappointed that the City has chosen an adversarial path over a collaborative one. The City’s position has been to insist that no actions taken or proposed by Waymo would satisfy the complaining neighbors and therefore must be deemed insufficient,” a Waymo spokesperson stated.
Waymo pushes back
In its legal complaint, Waymo stated that its “activities at the Broadway Facilities do not constitute a public nuisance.” The company also noted that it “faces imminent and irreparable harm to its operations, employees, and customers” from the city’s order. The suit also stated that the city was fully aware that the Voltera charging sites would be operating around the clock to support Waymo’s self-driving taxis.
The company highlighted over one million trips in Santa Monica since launch, with more than 50,000 rides starting or ending there in November alone. Waymo also criticized the city for adopting a contentious strategy against businesses.
“The City of Santa Monica’s recent actions are inconsistent with its stated goal of attracting investment. At a time when the City faces a serious fiscal crisis, officials are choosing to obstruct properly permitted investment rather than fostering a ‘ready for business’ environment,” Waymo stated.
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Tesla FSD v14.2.2 is getting rave reviews from drivers
So far, early testers have reported buttery-smooth drives with confident performance, even at night or on twisty roads.
Tesla Full Self-Driving (Supervised) v14.2.2 is receiving positive reviews from owners, with several drivers praising the build’s lack of hesitation during lane changes and its smoother decision-making, among others.
The update, which started rolling out on Monday, also adds features like dynamic arrival pin adjustment. So far, early testers have reported buttery-smooth drives with confident performance, even at night or on twisty roads.
Owners highlight major improvements
Longtime Tesla owner and FSD user @BLKMDL3 shared a detailed 10-hour impression of FSD v14.2.2, noting that the system exhibited “zero lane change hesitation” and “extremely refined” lane choices. He praised Mad Max mode’s performance, stellar parking in locations including ticket dispensers, and impressive canyon runs even in dark conditions.
Fellow FSD user Dan Burkland reported an hour of FSD v14.2.2’s nighttime driving with “zero hesitations” and “buttery smooth” confidence reminiscent of Robotaxi rides in areas such as Austin, Texas. Veteran FSD user Whole Mars Catalog also demonstrated voice navigation via Grok, while Tesla owner Devin Olsen completed a nearly two-hour drive with FSD v14.2.2 in heavy traffic and rain with strong performance.
Closer to unsupervised
FSD has been receiving rave reviews, even from Tesla’s competitors. Xpeng CEO He Xiaopeng, for one, offered fresh praise for FSD v14.2 after visiting Silicon Valley. Following extended test drives of Tesla vehicles running the latest FSD software, He stated that the system has made major strides, reinforcing his view that Tesla’s approach to autonomy is indeed the proper path towards autonomy.
According to He, Tesla’s FSD has evolved from a smooth Level 2 advanced driver assistance system into what he described as a “near-Level 4” experience in terms of capabilities. While acknowledging that areas of improvement are still present, the Xpeng CEO stated that FSD’s current iteration significantly surpasses last year’s capabilities. He also reiterated his belief that Tesla’s strategy of using the same autonomous software and hardware architecture across private vehicles and robotaxis is the right long-term approach, as it would allow users to bypass intermediate autonomy stages and move closer to Level 4 functionality.
Tesla (TSLA) receives “Buy” rating and $551 PT from Canaccord Genuity
Waymo sues Santa Monica over order to halt overnight charging sessions
