It's one thing to have the technology for self-driving cars, and it's an entirely different matter to have the legislation in place that allows the cars on the road legally.

In this clip from the Industry Focus: Energy podcast, our market analysts explain how some companies that produce self-driving car technology have been dealing with the sluggish pace of regulation.

A full transcript follows the video.

This podcast was recorded on June 23, 2016.

Lindsay Zadunayski: Multiple states have already introduced legislation to limit or ban self-driving cars. Is the future of this industry legitimately in danger, or are these just preemptive moves that will likely relax over time?

Taylor Muckerman: That's a question for today's day and age, absolutely.

Sean O'Reilly: Yeah. It definitely seems like Silicon Valley is not waiting for cities and government to come up with the regulations; they're just doing it now.

Muckerman: I feel like there are cars that could...I mean, Tesla (NASDAQ:TSLA) could get you on a major highway from on-ramp to exit ramp without [you] even touching the steering wheel for the most part, if it's a heavily trafficked highway. I just saw a company, they came out the other day. It's a small start-up, but basically this is pretty wild. They're basically 3D printing miniature buses that can hold about six to 10 people.

O'Reilly: Did you see the photo? They're really cute.

Muckerman: ...Yeah they are. It basically looks like a giant tooth on wheels. A giant molar on wheels.

O'Reilly: Have you seen what he's talking about Lindsay?

Zadunayski: No, I'll look it up.

O'Reilly: We'll have to send it to you.

Muckerman: We can tweet it out from our Industry Focus twitter handle, but basically, they're 3D printing these little buses and they're using IBM Watson as basically the tool to communicate and operate between the humans. You can get on this bus and say: "Take me to work!" and it will know where you work, it will know how to get there, and it will take you there. It's already ready to drive on the roads. Tesla's driving on the roads. Actually, internally, they pulled back on their own automated driving because people were putting YouTube videos up of them, flipping the switch and climbing in the backseat, and leaving the driver's seat completely empty.

O'Reilly: Liability.

Muckerman: Yes. They realized that humans in general aren't quite ready for this. Cars might be, but humans aren't. Then you look at this British start-up that I came across the other day called Immense Simulations. Basically, a video game company that is now digitally recreating virtual worlds. They mapped Manchester, England, on a one-to-one digital replica, complete with simulated activity for its 100,000 residents. That's what you're really going to have to see is cities and areas---

O'Reilly: Why did they recreate the Matrix in a suburb of London?

Muckerman: You want these cities to be 3D mapped so that cars know exactly, not just where the roads are headed, but where objects of obstruction, building, or parking garages...they need to know where everything exists, not just where the curbs do. 3D imaging of the cities is probably what's going to be needed before cities and states completely release the collar, here. You see in Nevada, they've already approved the testing of autonomous semi-truck rigs. There's been a fleet of them on the road over there, I can't recall the company that makes them, but fully autonomous semi-trucks. They shut off if there's inclement weather, you have to take over if there's inclement weather, or if it's night time, but if they're on a highway on a sunny or cloudy day, you could push a button and these tractor trailer trucks will be driving around Nevada with no one touching the steering wheel.

O'Reilly: Bringing it around to her question then, it seems like just competition between cities and continued technological advancements are going to win out, and these eventually will get relaxed.

Muckerman: I don't necessarily think it's a competition, I think these cities want to -- for a lack of better term -- pump the brakes on this. They don't want to inhibit the technological growth, but they don't want cars out there driving by themselves without some semblance of direction and regulation. 

Sean O'Reilly has no position in any stocks mentioned. Taylor Muckerman owns shares of Tesla Motors. The Motley Fool owns shares of and recommends Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.