Tesla stock rebounds as California approves initial permit for ride-hailing

Tesla stock (TSLA) rebounded on Wednesday on news that the EV maker was one step closer to robotaxi ride-hailing in the state of California.

The California Public Utilities Commission (CPUC) said it approved Tesla’s application for a transportation charter-party carrier permit (TCP). Tesla’s “A” certificate allows for chartered and point-to-point hired trips, with charges based on mileage and/or time.

Tesla shares closed up nearly 5% on Wednesday.

Read more about Tesla stock moves and today’s market action.

Currently, the permit allows Tesla to perform supervised ride-hailing in California for its employees, for example, but “does not authorize them to provide rides” in autonomous vehicles and does not allow Tesla to operate a ride-hailing service to the public, CPUC said.

Tesla would need to file for a transportation network company (TNC) permit to perform activities like “ridesharing” or “ridehailing” and would have to participate in CPUC’s Autonomous Vehicles (AV) Passenger Program to test supervised or unsupervised driverless rides, CPUC said.

Furthermore, Tesla would need a safety authorization from the California Department of Motor Vehicles (DMV) to participate in the AV Passenger Program; CPUC said Tesla does not have the “authority” from the DMV to test any type of driverless rides at this time.

rMuch of Tesla’s rich valuation is based on the promise of its robotaxi product and service offering. In addition to testing in California, CEO Elon Musk has said that unsupervised, paid FSD (Full Self-Driving) was coming to Austin, Texas, later this year.

Musk’s connection with the White House through his leadership of the controversial DOGE commission is seen as a way to pave a more regulatory-friendly approach to future robotaxi deployments, though much of the permitting process is still handled at the state and local government levels.

Tesla’s Cybercab, a two-person vehicle without pedals or a steering wheel, is the company’s purpose-built robotaxi EV, which the company is targeting for a 2026 launch. However, Tesla is using current-generation vehicles like its Model Y and Model 3 to handle autonomous testing.

Also lifting Tesla shares today is a bullish upgrade from Cantor Fitzgerald.

Following a recent factory visit, analyst Andres Sheppard wrote that the recent massive downdraft in Tesla shares represented an “attractive entry point for investors,” with the company’s autonomous ride-hailing effort in Austin a likely catalyst for the stock and FSD rollouts in China and Europe. Sheppard upgraded shares to Overweight from Neutral and maintained his $425 price target

That said, Sheppard acknowledged that headwinds remained, such as Trump tariffs, the likely loss of EV tax credits, and Musk’s political forays.

“We also expect a mild 1Q, driven by lower demand in Europe and increased competition in China, plus some negative sentiment from Elon’s polarizing politics,” Sheppard said.

Cantor Fitzgerald’s Tesla upgrade comes after former chair and CEO Howard Lutnick left the firm to become commerce secretary, working alongside DOGE leader Elon Musk at the White House.

Though Lutnick stepped down and claims to no longer control Cantor Fitzgerald, he appointed his sons Brandon and Kyle as chair and executive vice chair, respectively.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on X and on Instagram.

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