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The National Highway Transportation and Safety Authority (NHTSA) has announced that it will speed up its exemption processes to allow firms to deploy autonomous vehicles, the agency revealed in a letter today. Its letter sent Tesla shares more than 2% higher as investors bet that the firm could benefit from an expedited approval process for its Cybercab platform as the Cybercab vehicles do not have any controls present which allow a driver to operate the vehicle. The Cybercab and autonomous or assisted driving accounts for a large part of Tesla's valuation, and investors have been hopeful about President Trump and Elon Musk's relationship to help the firm seek approval for its new technologies.
Tesla's Cybercab Could See Regulatory Approval In Months Instead Of Years
The letter from the NHTSA comes a day after President Trump rescinded California's electric vehicle mandate, which made electric vehicle sales compulsory in the state. In it, the NHTSA outlines that the agency is "streamlining its exemption process for commercial deployment of vehicles" to streamline the approval process for automated driving system (ADS) vehicles.
The current rules allow the NHTSA to exempt vehicles from certain standards, provided the applicants can prove to the agency that they have tried to comply with the law and would face significant hardship from the rules, describe their efforts to comply with the standards, enable the development of low-emissions vehicles and not harm vehicle safety and are unable to sell their vehicle despite demonstrating adequate safety.
According to the regulator, it may grant a car manufacturer an exemption "if at least one of four bases listed in the statute is met and NHTSA determines that the exemption is consistent with the public interest and the Safety Act."
The four "bases" listed by the NHTSA above are covered by rules dubbed as Part 555. In its statement, the NHTSA outlines that these rules were "designed for traditional vehicles" and as such, are not "well suited for processing exemptions involving ADS-equipped vehicles in a timely manner or overseeing the unique complexities involving their operations." It adds that the long processing times stemming particularly from "reviews of requests involving ADS have tended to require extensive follow-up with applicants" have led to longer review times.
As part of its efforts to streamline the process, the regulator will publish instructions to help applicants better understand the application process. In order to reduce the "prolonged" review times, the agency aims to "develop terms that could be included in Part 555 exemption grants, when appropriate, to condition operations of exempted ADS- equipped vehicles on enhanced and continuing oversight from NHTSA."
The new rules and the revised application processing approach, through which the agency might bring down the approval process to "months" could help Tesla with its Cybercab platform. The Cybercab stands out from other vehicles, including Teslas, as it does not have controls that allow a driver to operate a car. These include a steering wheel and brakes to indicate the car's aim of functioning as a pure-play autonomous ride-sharing vehicle. Tesla's shares are up by 4% today after the letter, after having dipped by 2.2%. The stock is down 12% year-to-date.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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