Tesla expected to launch long-discussed robotaxi service

Tesla is set to launch its long-awaited robotaxi service this Sunday in Austin, marking a significant milestone in the company's push toward autonomous driving technology. This move is expected to be the first step in what many of Elon Musk’s supporters believe could become Tesla’s next major growth engine.

The robotaxi rollout will initially use the Model Y SUV, not the highly anticipated Cybercab that Musk unveiled last year, which remains under development and isn’t expected to go into production until 2026. Tesla’s choice to start with the Model Y reflects its effort to move forward while maintaining safety and reliability with an already proven vehicle.

This development comes at a pivotal moment for Musk, who has recently distanced himself from his controversial role in Donald Trump’s administration. The falling-out between Musk and Trump earlier this month, marked by a series of public attacks and criticisms, drew widespread attention. Since then, Musk has expressed regret over some of his remarks and has refocused on his business pursuits, especially Tesla's operations in Texas.

According to Wedbush analyst Daniel Ives, this new focus on autonomous technology could significantly boost Tesla’s market value—potentially by as much as $1 trillion. “There are countless skeptics of the Tesla robotaxi vision,” Ives said, “but the golden era of autonomous for Tesla officially kicks off on Sunday in Austin.”

Austin was chosen for the debut due to Texas’s business-friendly regulatory environment. The Texas Department of Transportation confirmed that autonomous vehicles (AVs) are allowed on public roads as long as they meet existing safety and insurance standards. Several AV companies are already operating in the area, including Waymo (Alphabet/Google), Zoox (Amazon), and Motional (Hyundai).

However, the upcoming service launch is not without its challenges. Texas legislators recently passed a bill requiring companies to obtain prior approval from the state’s Department of Motor Vehicles before operating AVs without human drivers. This law will take effect on September 1. In a letter dated June 18, seven Democratic lawmakers urged Tesla to postpone its launch until after the law comes into force and requested detailed documentation to confirm Tesla's compliance.

Musk had originally targeted June 12 for the launch but delayed it, citing heightened safety concerns. “We want to deliberately take it slow,” he told CNBC on May 20. The initial rollout will include just 10 vehicles operating within a geofenced area in Austin and will be available only to invited early-access users. Operating hours will run from 6:00 a.m. to midnight.

Musk indicated the fleet could grow to about 1,000 vehicles over the coming months, with expansions planned in cities such as San Francisco, Los Angeles, and San Antonio.

Tesla enthusiast and social media figure Sawyer Merritt shared details of the launch on Musk’s platform X, stating that Tesla had authorized him to release the information. He confirmed that the company would begin with a controlled and limited launch to gather data and ensure safety protocols are fully in place.

Tesla’s entry into the robotaxi space comes later than some competitors, notably Waymo, which has already rolled out commercial robotaxi services in several U.S. cities. Meanwhile, Tesla’s Full Self-Driving (FSD) software continues to face scrutiny.

In October 2024, the U.S. National Highway Traffic Safety Administration (NHTSA) opened an investigation into Tesla’s FSD software following reports of four crashes. On May 8, the agency requested additional information from Tesla in light of the upcoming Austin launch.

The NHTSA clarified that it does not pre-approve new technologies, emphasizing that vehicle manufacturers must certify their vehicles meet safety standards. The agency continues to monitor and investigate incidents that may indicate safety defects.

Despite recent financial setbacks, including a 71% drop in first-quarter profits, Tesla’s bold move into autonomous services could mark the beginning of a new chapter—one that investors and fans alike hope will restore momentum to the company’s trajectory.