Tesla announced a launch of robotaxis across the Bay Area last weekend, complete with internal employee memos and accelerated timelines.

But state officials warned that the company doesn't have permits to operate autonomous vehicles in California.

The California Public Utilities Commission released a statement that said “Tesla has not received approval from the CPUC to offer autonomous passenger service to customers, paid or unpaid, with or without a driver (nor has the company applied).”  The Department of Motor Vehicles added that Tesla's decade-old testing permit doesn't cover commercial passenger service.

Elon Musk has promised that Tesla's robotaxi service would reach "half the population of the U.S." by year's end.

Google-owned competitor Waymo has slowly expanded its fleet across the Bay Area and into the South Bay, saying it now provides approximately 250,000 paid rides weekly.

The San Francisco Standard reported that Tesla’s Transportation Charter-Party Carrier Permit for traditional taxi service with human drivers specifically prohibits autonomous operations. So Tesla employees will sit behind the wheel of cars using self-driving software.

Tesla is in a tangle with California's DMV in administrative court over allegations that it misled consumers about Autopilot and Full Self-Driving capabilities. Hearings are underway in Oakland, where the DMV wants to suspend Tesla's manufacturing and sales licenses for at least 30 days. Tesla’s operations in Fremont and Palo Alto employ 10,000 workers.

California requires permits for robotaxis from both the DMV and CPUC, detailed safety protocols, comprehensive insurance, and extensive operational data sharing.

State lawmakers have been refreshingly direct about Tesla's regulatory end-run. Senator Scott Wiener warned in a statement to the San Francisco Chronicle that “If Tesla actually deploys its AVs in San Francisco without permits, these vehicles should be seized and impounded. Elon Musk isn't exempt from those rules.’

Assemblymember Catherine Stefani told the San Francisco Standard that “Elon Musk is daring the state to stop him—and if California regulators don't act, they're handing him the keys to ignore every safety rule we have.”.

Tesla’s announcement of a robotaxi launch in this environment without securing proper permits caused business media to suggest either confidence in the company's regulatory strategy or a lack of understanding of autonomous vehicle oversight in California.

CNBC reported that the National Highway Traffic Safety Administration has been evaluating Tesla's driver assistance technology after multiple crashes involving emergency responder vehicles.

Tesla still plans a rapid expansion of its autonomous fleet.. The company identified Arizona, Florida and Nevada for robotaxi launches by year's end. Whether California will be part of that timeline depends on Tesla's willingness to work within the state's regulatory framework.

Tesla’s net income plunged 16% in the second quarter, marking another quarter of steep declines at the company as automotive sales continue to fall.

Musk told the Wall Street Journal that he plans to release a lower-priced Model Y electric vehicle and talked up plans to “greatly expand” Tesla’s robotaxi service to half the country by the end of the year.

The electric-vehicle maker’s second-quarter revenue declined after a big drop in automotive deliveries, which were down 13.5% from a year earlier.

Tesla reported $1.17 billion in net-income, down from $1.4 billion the year prior. The company also reported $22.5 billion in revenue for the quarter, down 12%. Revenue from its automotive business fell 16%. The energy business fell 7%.