Amazon’s (AMZN) autonomous vehicle subsidiary, Zoox, just got the green light to hit the road. After months of review, the National Highway Traffic Safety Administration (NHTSA) has granted Zoox a key exemption from federal vehicle safety standards, allowing its steering-wheel-free robotaxis to operate on public roads across the U.S.
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This marks a key step for Zoox, which has always focused on building a unique self-driving shuttle with no pedals, no steering wheel, and seats that face each other. With the approval, Zoox can grow its business and start making up to 10,000 vehicles a year at its new factory in Hayward, California.
Importantly, the clearance strengthens Zoox’s position as it prepares to launch its service and compete with rivals like Alphabet’s (GOOGL) Waymo.
Approval Comes Under New Policy
The exemption is part of a change in U.S. policy. In April, the Department of Transportation expanded its Automated Vehicle Exemption Program to include domestically produced self-driving vehicles, not just ones imported.
It must be highlighted that as a condition of the approval, Zoox is required to “remove or cover” any claims that its vehicles meet these specific federal safety rules. The NHTSA also closed its investigation into how Zoox certified its robotaxis, which started in March 2023.
What’s Next for AMZN’s Zoox
With this approval, Zoox can launch its robotaxi service later this year, starting in Las Vegas. It also plans to expand to big cities like San Francisco, Austin, Miami, Los Angeles, and Atlanta.
Similar to Waymo, Zoox has obtained permission to offer paid rides in California. Its vehicles use a full set of sensors, lidar, radar, thermal cameras, microphones, and regular cameras to safely navigate the roads.
Is Amazon a Buy, Hold, or Sell?
Turning to Wall Street, AMZN stock has a Strong Buy consensus rating based on 43 Buys and one Hold assigned in the last three months. At $264.21, the average Amazon stock price target implies a 24.83% upside potential.
