San Francisco is likely to prove a more challenging area for Tesla’s self-driving systems. The city is significantly more densely populated and has more challenging roads, largely due to its extreme topography and steep streets.

Tesla has told California Department of Motor Vehicles officials that it plans to take a phased approach to operating in the state, starting with giving employees pre-arranged rides using a safety

Tesla has applied for a permit to test and deploy autonomous vehicles in Arizona. It's also eyeing expansion in Austin, Texas, and California.