California’s long-awaited high-speed rail project could see a major change in its first operating route. Instead of running between Bakersfield and Merced, the California High-Speed Rail Authority (CHSRA) is considering shifting the initial northern terminus to Gilroy, after a new report suggested the change would bring in more riders and higher revenue.
The development was revealed following the release of the 2025 Supplemental Project Update Report, which concluded that a line extending to Gilroy would yield “significantly higher ridership and revenue outcomes” compared to Merced.
A CHSRA spokesperson confirmed the discussions to Fox26 News, stating that a Bakersfield-to-Gilroy alignment is being considered because the Bakersfield-to-Merced option “would likely operate at a loss for several years.”
The news caught some local officials off guard. According to Fox26, Merced County Management analyst Dalia Costa pressed CHSRA staff about the proposal at a recent board meeting, saying she had only learned of the possible change from media reports.
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Despite the controversy, CHSRA emphasized that extending the line to Merced remains part of the overall statewide plan, which envisions multiple construction phases over the coming decades.
The U.S. continues to lag behind other countries in high-speed rail infrastructure, with countries such as Japan, China, and those in Western Europe already operating expansive and efficient networks. California’s system is seen as the nation’s most ambitious attempt to close that gap.
However, the project has faced repeated financial and political hurdles. Earlier this summer, Transportation Secretary Sean Duffy revoked a $4 billion federal grant that had been allocated to California’s high-speed rail, raising further questions about federal support.
Even as the debate over Merced versus Gilroy plays out, California’s high-speed rail project is still intended to serve as the backbone of a larger West Coast rail network. Officials have highlighted potential future connections with Brightline West, the privately developed high-speed line under construction between Las Vegas and Southern California.
That connection would require construction of the High Desert Corridor, a proposed rail link between Palmdale and Victor Valley, though it has yet to clear regulatory hurdles.
The decision over where to end the line in its first phase could have significant long-term consequences for ridership, revenue, and public confidence in the project. Choosing Gilroy may strengthen links to the Bay Area earlier in the rollout, but it could leave Merced feeling sidelined despite years of planning that positioned the city as a key hub.
As the CHSRA spokesperson reiterated, though, Merced remains part of the state’s ultimate high-speed rail vision — the question now is timing and financial sustainability.
Originally reported by James Bickerton in News Week.
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