Tesla is positioning itself to challenge the ride-hailing industry's established players through recent regulatory moves in California.

Tesla Inc. is seeking approval to offer ride-hailing services in California, a key step by Elon Musk’s company to begin carrying paying customers while its traditional car-selling business falters.

Tesla has applied for a permit typically associated with chauffeur-operated services, Bloomberg News reported on Thursday, marking the first phase of a series of regulatory approvals required for the electric car maker to launch its promised robotaxi service.

Tesla applied for a permit with the California Public Utilities Commission (CPUC) to operate a transportation service in the state — a required first step