TLDR
- Tesla launched its robotaxi service in Austin with 10-20 Model Y vehicles, charging $4.20 per trip for select riders including influencers and retail investors
- The service operates in a limited geofenced area from 6 a.m. to midnight with Tesla employees as safety monitors in passenger seats
- Wedbush analyst Daniel Ives maintained his $500 price target and called this “the golden era of autonomous” for Tesla
- Tesla stock rose 1.8% in pre-market trading following the launch, though shares remain down 20% year-to-date
- The company plans to scale up throughout summer and potentially expand to 25 U.S. cities by 2026
Tesla rolled out its long-awaited robotaxi service in Austin on Sunday, marking a quiet debut for what CEO Elon Musk views as a game-changing business line. The launch featured hand-picked retail investors and social media influencers as the first riders.
The service launched with just 10 to 20 Model Y vehicles operating in a limited geofenced area of Austin. Each vehicle carries a Tesla employee in the passenger seat as a safety monitor. The company charged riders a flat rate of $4.20 per trip.
Driverless Robotaxi drive at night. It’s insane to see Teslas without drivers.
We are living in the future. pic.twitter.com/iozHvMfg2C
— Tesla Owners Silicon Valley (@teslaownersSV) June 23, 2025
Tesla chose an unusually low-key approach for the launch. There was no kickoff event or formal announcement. This contrasts sharply with the company’s typical style, which included a “Cyber Rodeo” for its Texas factory opening in 2022.
The first riders shared videos of their experiences on social media. Herbert Ong, who runs a Tesla fan account, praised the vehicle’s speed and autonomous parking abilities. Another influencer called the ride smoother than with a human driver.
Tesla stock responded positively to the launch news. Shares rose as much as 1.8% in pre-market trading on Monday. However, the stock remains down 20% for the year as the company faces a vehicle sales slump.
Analyst Reactions Split on Tesla’s Robotaxi Future
Wall Street analysts remain divided on Tesla’s robotaxi prospects. UBS analyst Joseph Spak raised his price target to $215 but maintained a sell rating. He believes the robotaxi opportunity is already priced into the stock at current levels.
Wedbush analyst Daniel Ives took a more optimistic view. He called the launch “the golden era of autonomous” for Tesla. Ives maintained his buy rating and $500 price target, which implies 55% upside from current levels.
Ives believes Tesla’s AI future alone could be worth $1 trillion. Combined with the company’s current $1.01 trillion market cap, he suggests Tesla could reach $2 trillion in coming years. The analyst expects Tesla to scale up service throughout the summer in Austin.
The service operates between 6 a.m. and midnight daily within the geofenced area. Service may be limited during bad weather. Tesla hasn’t announced when the service will open to the general public.
Competition Heats Up in Austin Market
Tesla faces competition in Austin from established players. Waymo, owned by Google parent Alphabet, is scaling up in the city through a partnership with Uber. Amazon’s Zoox is also testing autonomous vehicles there.
The robotaxi launch comes as Tesla pivots toward unproven technologies. Musk has been reorienting the company around self-driving vehicles and humanoid robots. Some investors hope these new segments can revive Tesla’s growth.
Videos from the launch showed mostly routine driving scenarios. The vehicles navigated intersections, avoided pedestrians, and parked autonomously. There were some minor issues, including one vehicle briefly stopping in the middle of a road when a rider tested the pull-over button.
Here we go, our Robotaxi is here! pic.twitter.com/fsCA6G1m6R
— Dan Burkland (@DBurkland) June 22, 2025
Tesla is deploying vehicles cautiously to show they can handle real-world traffic safely. Other companies have faced regulatory scrutiny after accidents. Cruise, GM’s former autonomy unit, suspended operations in 2023 after a pedestrian accident.
Uber ceased self-driving vehicle testing after a fatal accident in Arizona in 2018. The company later sold its autonomous driving business. Tesla aims to avoid similar setbacks with its measured approach.
Ives expects Tesla to expand to around 25 U.S. cities by 2026. He believes President Trump could help reduce regulatory barriers for the autonomous vehicle sector. This comes despite recent tensions between Trump and Musk.
The analyst described the relationship as a “BFF/frenemy situation” but believes Trump will ultimately support the sector. He wants the U.S. to maintain its lead over China in the AI race. Tesla’s robotaxi service represents a key component of that competition.
Tesla stock currently trades at $322.16, down from higher levels earlier this year. Analysts have a moderate buy consensus rating with an average price target of $348.39. This suggests 8.1% upside potential from current levels.
Tesla began its robotaxi service with 20 Model Y vehicles in Austin, charging riders $4.20 per trip in a geofenced area with safety monitors present.
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