Tesla’s robotaxi service, touted by Elon Musk as the future of his flagging electric-car maker, launched in the company’s home city of Austin on Sunday with about 10 vehicles and a human safety driver on board amid regulatory scrutiny of its self-driving technology.
Shares in Tesla have risen about 50 per cent from this year’s low in early April, with investors hopeful the autonomous ride-hailing service will help revive a company that has suffered declining sales and a consumer backlash against Mr Musk’s political activism.
Despite the hype surrounding Tesla’s robotaxi, the launch – with a company employee seated in the passenger side for safety while leaving the driver’s seat empty – was low-key, and the initial service was open only to a select group of social media influencers.
Shortly before the launch, Mr Musk said on social media that the robotaxi service would begin “with customers paying a $4.20 flat fee”.
According to Mr Musk, who has stepped back from his US government role to focus on the electric-car maker and the robotaxi, the self-driving Tesla Model Y vehicles will only operate in limited areas, avoid challenging intersections and have teleoperators who can intervene if problems arise.
The limited launch comes as the National Highway Traffic Safety Administration continues to carry out multiple investigations into Mr Musk’s claims about the capabilities of Tesla’s autopilot and “full self-driving” systems. Despite its name, the full self-driving system still requires humans to sit in the driver’s seat and pay full attention – unlike Google’s Waymo taxis.
The NHTSA wrote a letter in early May seeking additional information about technologies that would be used in Tesla’s robotaxi service. The regulator said it had received Tesla’s response and was reviewing its content.
Mr Musk said in a social media post this month that the company was being “super paranoid” about safety. However, he has also claimed that there would be 1,000 robotaxis “in a few months” and that the service would expand to cities such as San Francisco and Los Angeles.
On Sunday, Tesla opened a new website for the public to sign up to get updates on the robotaxis, which can be hailed via an app.
It is unclear how fast Tesla will be able to expand its service and catch up with Waymo, the only company with a fully public self-driving ride-hailing service in the US. Waymo rolled out its fleet in San Francisco three years ago.
A group of Democratic lawmakers in Texas wrote to Tesla recently urging the company to delay its robotaxi launch until September, when a new law on autonomous vehicles is due to be implemented. State governor Greg Abbott signed the rules — whi–h require a state permit to operate self-driving vehicles — int– law on Friday.
Tesla’s technology relies only on a set of cameras mounted on its vehicles, compared with the more expensive radar and lidar sensors used by Waymo and other rivals.
Mr Musk claims Tesla’s approach will allow it to expand the service more quickly and at cheaper prices. Tesla has said its Cybercab robotaxi, which has no steering wheel or pedals and was unveiled last year, will sell for less than $30,000.
Rivals, including Waymo and Amazon-owned Zoox, use remote monitoring systems with support staff able to intervene and guide a vehicle that has ground to a halt because of an obstacle or crash. Unlike Tesla, they do not have a safety driver in the vehicle.
“Tesla has in no way demonstrated that its system is capable of the kind of accuracy and reliability that would be necessary for deployment in a range of driving conditions,” said Bryant Walker Smith, an associate professor at the University of South Carolina.
Barclays analyst Dan Levy also cautioned there was still a huge amount of work to be done in building out the infrastructure to enable fully autonomous vehicles, saying “catching up to or surpassing Waymo will be no small feat”. -Copyright The Financial Times Limited 2025
