Elon Musk said Tesla's robotaxis will be limited to certain parts of Austin and avoid intersections the company deems unsafe after the CEO was asked on TV about Business Insider's reporting on a critical error made by Tesla's Full Self-Driving Supervised software.

In a May 17 story, two BI reporters took rides in a Waymo and a 2024 Tesla Model 3 equipped with the latest FSD software to compare both companies' autonomous driving technologies. Toward the end of the test, Tesla's FSD ran a red light at a complex intersection in San Francisco.

During a discussion about Tesla's robotaxi launch, which is set for June in Austin, CNBC's David Faber asked Musk about BI's report.

"I guess my question is, is that a concern at all for you in terms of it encountering things that are still sort of a crucial test, and perhaps it fails," Faber said.

Musk said BI's test "made no sense" because it compared Tesla's FSD Supervised, which he said assumes a driver is behind the wheel and ready to take over, rather than FSD Unsupervised.

BI noted in the story that the test compared a piece of Tesla technology that could be different from the software that will power the company's robotaxis. BI reported one of the test's goals was to see how far FSD had come since its beta rollout in 2020.

Musk and a Tesla spokesperson didn't immediately respond to a request for comment on Tuesday. A Tesla spokesperson also didn't respond to a request for comment to BI's previous story about the driving test on May 17.

In the CNBC interview, Musk didn't address specific details in BI's reporting. However, he said Tesla's robotaxis will be geo-fenced to certain parts of Austin.

Alphabet's Waymo also uses geo-fencing to limit its autonomous cars to certain parts of a given city, including, for the moment, highways.

"When we deploy the cars in Austin, we are actually going to deploy it not to the entire Austin region but only to the parts of Austin we consider to be the safest," Musk said on CNBC. "So we will geo-fence it."

He added: "It's not going to take intersections unless we are highly confident it's going to do well with that intersection. Or it will just take a route around that intersection."

BI's test showed that Waymo appeared to avoid the same intersection where Tesla FSD made the error. Instead, Waymo took BI through a route that was farther and less time-efficient, based on estimated time arrivals provided by Google Maps.

During the CNBC interview, the Tesla CEO reiterated his prediction that Tesla's robotaxis will see a quick ramp-up after a limited rollout next month.

"We'll start with probably 10 for a week, then increase it to 20, 30, 40," Musk said. "It will probably be at 1,000 within a few months."