Tesla’s Modest Robotaxi Rollout Staged for Retail Investors
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Tesla Inc. rolled out its long-promised driverless taxi service to a handful of riders June 22, a modest debut for what Elon Musk sees as a transformative new business line.
The first robotaxi trips were limited to a narrow portion of Tesla’s hometown of Austin, with an employee sitting in the front passenger seat of each vehicle to monitor for safety. The carmaker hand-picked a friendly group of retail investors and social media influencers to serve as initial riders and live-stream their trips.
In one video, Herbert Ong, who runs a fan account, marveled over the speed of the vehicle and its ability to park autonomously. Another influencer with the X handle @BLKMDL3 deemed his trip smoother than with a human driver. Sawyer Merritt, a Tesla investor who runs an account focused on the company, called the experience “awesome.”
With no kickoff event and little in the way of formal announcements, Tesla relied largely on word of mouth and media coverage ahead of the robotaxi launch. The unveiling was uncharacteristically low-key for a company that held a “Cyber Rodeo” to mark its Texas factory opening in 2022 and an invite-only party last year near Hollywood to unveil autonomous vehicle prototypes.
While Musk has cautioned that autonomy is unlikely to “move the financial needle” at Tesla for at least another year, progress toward getting the service started has boosted the company’s shares. The stock rose as much as 1.8% as of 5 a.m. June 23 in New York, before the start of regular trading.
Musk has been reorienting the carmaker around still-unproven technologies including self-driving vehicles and humanoid robots. Some investors are counting on new business segments to revive Tesla from a vehicle sales slump and consumer backlash against its CEO. The company’s shares are still down 20% this year.
This is what it looks like to use a driverless Tesla Robotaxi — Dirty Tesla (@DirtyTesLa)
“While Tesla appears to be well positioned, we believe the opportunity is already priced into the stock,” Joseph Spak, a UBS Group AG analyst with a sell rating on the shares, wrote in a report June 23. He raised his price target to $215, well short of its close at $322.16 last week.
Videos of the robotaxi launch posted June 22 were largely mundane, showing Model Y SUVs driving short distances, navigating intersections, avoiding pedestrians and parking — all with no one sitting in the driver’s seat. There were some hiccups, like when one streamer tested a button to have the vehicle pull over and it instead briefly stopped in the middle of a road before the vehicle began moving again.
Super congratulations to the software & chip design teams on a successful launch!!
Culmination of a decade of hard work.
Both the AI chip and software teams were built from scratch within Tesla. — Elon Musk (@elonmusk)
The first riders were charged a flat rate of $4.20 per trip, Musk said June 22. Robotaxis will be available between 6 a.m. and midnight daily within a geofenced area of the city, not including the airport, according to terms some early riders posted. Service may be limited or unavailable in inclement weather.
Tesla is deploying only 10 to 20 vehicles initially, aiming to show its cars can safely navigate real-world traffic, which has tripped up some other companies and brought regulatory scrutiny.
Cruise, the now-defunct autonomy business of General Motors Co., grounded its fleet in late 2023 and had its operating license suspended in California following an accident that injured a pedestrian. Uber Technologies Inc. ceased testing self-driving vehicles after one of its SUVs struck and killed a pedestrian in Arizona in 2018. Less than three years later, the company agreed to sell its self-driving business.
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Tesla hasn’t said when the robotaxi service will open to the general public, though Musk has pledged to scale up quickly and expand to other U.S. cities in the near future.
The carmaker will have some company in Austin. Waymo, the driverless-car unit of Google parent Alphabet Inc., is scaling up in the city through a partnership with Uber. Amazon.com Inc.’s Zoox is also testing there.
Dan Ives, an analyst with Wedbush Securities with the equivalent of a buy rating on Tesla shares, said he expects robotaxis to be competitive with Waymo from the start. After a member of his team rode in one June 22, the analyst told Bloomberg the robotaxi user experience was “better than expected.”
