News
Volkswagen, a rocky $50B EV bet, and the bid to chase Tesla’s software prowess
Among the old guard of the automotive industry, very few could hold a candle to Volkswagen, which has initiated a $50 billion bet on electric vehicles. The plan, it seemed, was aimed at ensuring that the veteran automaker could catch up to Tesla, a dedicated EV maker that has made a name for itself by releasing vehicles that receive over-the-air updates on a regular basis.
Yet as the first result of Volkswagen’s dedicated EV efforts, the ID.3, rolled off the assembly line, it became clear that releasing software-driven electric cars was not as simple as building the next iteration of the Golf. When the ID.3 was released, the vehicle was incomplete. It could drive, turn corners, and basically do anything that regular cars are expected to do. Software-wise, however, it was nowhere near done. Features that were promised were absent, and promised capabilities such as over-the-air updates were unavailable.
Even the ID.3’s heads-up display, a feature that is not present in rivals like the Model 3, didn’t function. Early users of the vehicle also reported hundreds of software bugs. By June last year, Volkswagen decided to delay the ID.3’s launch and sell the first batch of the cars without full software. The vehicles are expected to receive an update that would provide the ID.3 with its full feature set, but the initiative will require a service visit around February 2021.
As noted in a report from The Wall Street Journal, Volkswagen’s issues with the ID.3 were the result of the veteran automaker not being proficient in software. For years, industry analysts and leaders alike have suggested and peddled the “Tesla Killer” narrative, suggesting that once the big players of the auto industry get serious about electric vehicles, Elon Musk’s EV startup would be completely overrun. As it turned out, building electric cars was not as simple. Just because a company can produce good gas and diesel-powered cars does not mean that they can produce good EVs.
Karsten Michels, a senior engineer for Continental AG, one of the firms which Volkswagen tapped to develop the ID.3’s software, noted that the gravity of the task surrounding the development of custom vehicle software was underestimated. “Maybe we underestimated how much work is involved and how little we could actually rely on existing legacy software,” Michels said.
Peter Rawlinson, CEO of Lucid Motors, expressed his thoughts on the situation. “(Ever since Tesla launched its first car in 2008) there was this feeling that the really serious players are going to come. Now, the Germans have finally come, and they’re not as good as Tesla,” he remarked.
Volkswagen, for its part, seems to be taking the lessons it learned during the ID.3 rollout and is applying it for the release of the ID.4, a crossover SUV that could rival the Tesla Model Y. Herbert Diess, the Chairman of the Board of Management of Volkswagen Group and an executive who has struck a friendship of sorts with Tesla CEO Elon Musk, initiated efforts to overhaul the company’s software strategies. If successful, the ID.4, which will be produced in Europe, China, and the United States, would deliver on the promises set forth by the ID.3.
Ultimately, Volkswagen has learned a notable yet painful lesson during the ramp of the ID.3, the most notable of which is that software is something that legacy automakers still need to work on. Granted, software has been running in gas-powered cars for years, with average vehicles including dozens of parts with chips that are designed to perform specific tasks. EVs, however, require a different type of software, one that is more akin to those used by smartphones today. With electric cars, in-vehicle software becomes the heart of the vehicle, with updates becoming the equivalent of service visits in a gas-powered car. In-vehicle software today is never complete as well, as they must always be open to improvements.
Danny Shapiro, senior director of automotive at Nvidia, related his thoughts on the complexity of in-vehicle software. “The key here is taking this distributed system in the car, dozens if not hundreds of applications, and centralizing everything. This is very complex, especially with a car where the safety level is critical. You can’t just flip a switch and be a software company,” he noted.
Don’t hesitate to contact us for news tips. Just send a message to tips@teslarati.com to give us a heads up
News
Tesla lands approval for Robotaxi operation in third U.S. state
On Tuesday, Tesla officially received regulatory approval from the State of Arizona, making it the third state for the company to receive approval in.
Tesla has officially landed approval to operate its Robotaxi ride-hailing service in its third U.S. state, as it has landed a regulatory green light from the State of Arizona’s Department of Transportation.
Tesla has been working to expand to new U.S. states after launching in Texas and California earlier this year. Recently, it said it was hoping to land in Nevada, Arizona, and Florida, expanding to five new cities in those three states.
On Tuesday, Tesla officially received regulatory approval from the State of Arizona, making it the third state for the company to receive approval in:
BREAKING: Tesla has officially received approval from the Arizona Department of Transportation to launch its Robotaxi service on public roads in the state!
I just confirmed directly with the Arizona DOT that @Tesla applied for a Transportation Network Company permit on Nov 13th.… pic.twitter.com/iKbwfGfiju
— Sawyer Merritt (@SawyerMerritt) November 18, 2025
Tesla has also been working on approvals in Nevada and Florida, and it has also had Robotaxi test mules spotted in Pennsylvania.
The interesting thing about the Arizona approval is the fact that Tesla has not received an approval for any specific city; it appears that it can operate statewide. However, early on, Tesla will likely confine its operation to just one or two cities to keep things safe and controlled.
Over the past few months, Robotaxi mules have been spotted in portions of Phoenix and surrounding cities, such as Scottsdale, as the company has been attempting to cross off all the regulatory Ts that it is confronted with as it attempts to expand the ride-hailing service.
It appears the company will be operating it similarly to how it does in Texas, which differs from its California program. In Austin, there is no Safety Monitor in the driver’s seat, unless the route requires freeway travel. In California, there is always a Safety Monitor in the driver’s seat. However, this is unconfirmed.
Earlier today, Tesla enabled its Robotaxi app to be utilized for ride-hailing for anyone using the iOS platform.
News
Tesla ride-hailing Safety Monitor dozes off during Bay Area ride
We won’t try to blame the camera person for the incident, because it clearly is not their fault. But it seems somewhat interesting that they did not try to wake the driver up and potentially contact Tesla immediately to alert them of the situation.
A Tesla Robotaxi Safety Monitor appeared to doze off during a ride in the California Bay Area, almost ironically proving the need for autonomous vehicles.
The instance was captured on camera and posted to Reddit in the r/sanfrancisco subreddit by u/ohmichael. They wrote that they have used Tesla’s ride-hailing service in the Bay Area in the past and had pleasant experiences.
However, this one was slightly different. They wrote:
“I took a Tesla Robotaxi in SF just over a week ago. I have used the service a few times before and it has always been great. I actually felt safer than in a regular rideshare.
This time was different. The safety driver literally fell asleep at least three times during the ride. Each time the car’s pay attention safety alert went off and the beeping is what woke him back up.
I reported it through the app to the Robotaxi support team and told them I had videos, but I never got a response.
I held off on posting anything because I wanted to give Tesla a chance to respond privately. It has been more than a week now and this feels like a serious issue for other riders too.
Has anyone else seen this happen?”
My Tesla Robotaxi “safety” driver fell asleep
byu/ohmichael insanfrancisco
The driver eventually woke up after prompts from the vehicle, but it is pretty alarming to see someone like this while they’re ultimately responsible for what happens with the ride.
We won’t try to blame the camera person for the incident, because it clearly is not their fault. But it seems somewhat interesting that they did not try to wake the driver up and potentially contact Tesla immediately to alert them of the situation.
They should have probably left the vehicle immediately.
Tesla’s ride-hailing service in the Bay Area differs from the one that is currently active in Austin, Texas, due to local regulations. In Austin, there is no Safety Monitor in the driver’s seat unless the route requires the highway.
Tesla plans to remove the Safety Monitors in Austin by the end of the year.
Tesla has officially opened Robotaxi access to everyone and everyone, but there is one catch: you have to have an iPhone.
Tesla’s Robotaxi service in Austin and its ride-hailing service in the Bay Area were both officially launched to the public today, giving anyone using the iOS platform the ability to simply download the app and utilize it for a ride in either of those locations.
It has been in operation for several months: it launched in Austin in late June and in the Bay Area about a month later. In Austin, there is nobody in the driver’s seat unless the route takes you on the freeway.
In the Bay Area, there is someone in the driver’s seat at all times.
The platform was initially launched to those who were specifically invited to Austin to try it out.
Tesla confirms Robotaxi is heading to five new cities in the U.S.
Slowly, Tesla launched the platform to more people, hoping to expand the number of rides and get more valuable data on its performance in both regions to help local regulatory agencies relax some of the constraints that were placed on it.
Additionally, Tesla had its own in-house restrictions, like the presence of Safety Monitors in the vehicles. However, CEO Elon Musk has maintained that these monitors were present for safety reasons specifically, but revealed the plan was to remove them by the end of the year.
Now, Tesla is opening up Robotaxi to anyone who wants to try it, as many people reported today that they were able to access the app and immediately fetch a ride if they were in the area.
We also confirmed it ourselves, as it was shown that we could grab a ride in the Bay Area if we wanted to:
🚨 Tesla Robotaxi ride-hailing Service in Austin and the Bay Area has opened up for anyone on iOS
Go download the app and, if you’re in the area, hail a ride from Robotaxi pic.twitter.com/1CgzG0xk1J
— TESLARATI (@Teslarati) November 18, 2025
The launch of a more public Robotaxi network that allows anyone to access it seems to be a serious move of confidence by Tesla, as it is no longer confining the service to influencers who are handpicked by the company.
In the coming weeks, we expect Tesla to then rid these vehicles of the Safety Monitors as Musk predicted. If it can come through on that by the end of the year, the six-month period where Tesla went from launching Robotaxi to enabling driverless rides is incredibly impressive.
Tesla lands approval for Robotaxi operation in third U.S. state
Tesla ride-hailing Safety Monitor dozes off during Bay Area ride
