Tesla‘s long-overdue robotaxi is finally hitting the streets this weekend, however the rollout may face some roadblocks.
The Elon Musk-led electric vehicle company is predicted to roll out robotaxis in Austin, Texas, on June 22, with the primary driverless trip from the factory to a customer house expected on his birthday, June 28.
Musk shared news of the tentative debut in a post on social media platform X last week.
Here’s what we all know concerning the Tesla event up to now.
When and where
The launch will include a limited variety of Tesla vehicles debuting in Austin on June 22. The initial rides shall be within the Model Y and never the CyberCab that was unveiled in October.
Access to the vehicles and rides is by invitation only. Some influencers on social media have reported receiving early access invites to check out the brand new service starting Sunday.
Tesla fan, shareholder and promoter Sawyer Merritt posted details of the invite on Musk’s X, which outlines several notable specifics:
- Trips to or from airports are excluded
- Service could also be limited or unavailable attributable to bad weather
- A Tesla Safety Monitor will sit within the front right passenger seat through the trip
The rides are limited to a geofenced area of town and distant drivers shall be monitoring as a backup.
Musk told CNBC’s David Faber that robotaxis will only operate within the parts of Austin that the corporate would “consider to be the safest” and said Tesla shall be “watching” the cars in distant operations centers.
Can Musk deliver on guarantees?
Musk has long touted a driverless robotaxi, and the pressure is on the billionaire to deliver on his guarantees. As early as 2019, Musk said he was “very confident” that robotaxis would launch in 2020.
In May, Musk confirmed plans to debut the service in Austin this month, with launches later set for Los Angeles and San Francisco. On the time, Musk said the service would launch with 10 vehicles circulating Austin.
“It’s prudent for us to begin with a small number, confirm that things are going well after which scale it up,” he told CNBC’s Faber.
Wall Street analysts reminiscent of Wedbush’s Dan Ives imagine robotaxis will usher within the “golden era of autonomous for Tesla” that would power its market capitalization to greater than $2 trillion by the tip of next 12 months.
That is about double its market value from Wednesday’s close.
“There shall be many setbacks … but given its unmatched scale and scope globally we imagine Tesla has the chance to own the autonomous market and down the road license its technology to other auto players each within the U.S. and across the globe,” he wrote in a note.
Tesla, once seen as a self-driving tech leader, is now a laggard, attempting to catch as much as Alphabet-owned Waymo within the U.S.
Waymo, which said it reached 10 million trips in May, is already operating a fleet of business robotaxis across the U.S. and can also be in search of permission to check its autonomous vehicles, with a human safety driver on board, in Latest York City.
Regulatory hurdles and opposition
Tesla faces a bumpy road ahead, affected by regulatory hurdles and pushback from lawmakers.
On Wednesday, a gaggle of Democratic lawmakers in Texas called on Tesla to push off its robotaxi launch until Sept. 1, when Texas rolls out a brand new slate of self-driving laws.
“We imagine that is in one of the best interest of each public safety and constructing public transit operation,” the group said in a letter addressed to Tesla’s field quality director, Eddie Gates. In addition they asked for “detailed information demonstrating that Tesla shall be compliant with the brand new law” if it goes ahead with the launch.
Public safety advocates protested the launch in Austin earlier this month.
A gaggle often called The Dawn Project, a tech safety organization that’s critical of Tesla’s autonomous capabilities, demonstrated a Tesla Model Y with currently available “Full Self Driving” software running past a stopped school bus and hitting a child-sized mannequin. The group said it was a situation where the software misread the weather within the road.
“Any human … following the law would have stopped once they saw the varsity bus stopped with the lights flashing. They might have stopped,” Dawn Project founder Dan O’Dowd told CNBC’s “Squawk on the Street” on Friday.
O’Dowd, who also runs Green Hills Software, an organization that sells technology to Tesla competitors, told CNBC that the software is “nowhere near done” and should not be taking to the streets.
“This software doesn’t know the way to recognize a faculty bus,” he said.
Tesla’s FSD capabilities, which feature a typical FSD or FSD supervised, include automatic steering and parking, but have been connected to accidents and fatalities, in response to data tracked by the National Highway Traffic Safety Administration.
Tesla 12 months to this point stock chart.
Tesla under fire
Tesla’s brand has taken several hits in recent months with a decline in sales and reputational damage linked to Musk’s political activities.
Musk was a significant supporter of President Donald Trump, funneling lots of of thousands and thousands into his reelection campaign and later spearheading his Department of Government Efficiency effort aimed toward cutting costs. He left the department at the tip of May.
Musk’s close ties to Trump’s White House have caused owners to part with the brand and in some cases led to violence, with showrooms and vehicles targeted in arson and vandalism attacks.
But the connection between Musk and Trump soured earlier this month after the tech titan berated the president’s spending bill on X, resulting in a drastic sell-off within the stock. He later apologized for his social media posts, saying some “went too far.”
The EV maker can also be seeing a worldwide sales decline weighing on key markets reminiscent of the U.S. and Europe. Vehicle sales in Europe tanked 49% from a 12 months ago in April, while global first-quarter deliveries dropped 13%.
The decline was tied to a mix of Musk’s politics and heightened competition within the EV market.
— CNBC’s Lora Kolodny contributed to this report.
