Tesla stock pops 8% after 'foundational' robotaxi launch in Austin

Yahoo

13 hours ago

Tesla (TSLA) stock popped as its robotaxi test kicked off smoothly on Sunday, with investors and Tesla enthusiasts breathing a sigh of relief — at least for now.
'The @Tesla_AI robotaxi launch begins in Austin [Sunday] afternoon with customers paying a $4.20 flat fee!' CEO Elon Musk posted on X, confirming the start of the test in Austin, Texas.
Following Musk's tweet, numerous posters on X claimed they were able to hail and ride Tesla Model Ys emblazoned with 'Robotaxi' graphics in Austin, with one claiming he rode on 11 separate trips alone.
Tesla stock closed up 8.2% on Monday.
Read more about Tesla's stock moves and today's market action.
Tesla is starting off with 10 to 20 Model Y SUVs running as robotaxis in a geofenced area of Texas, with not only safety teleoperators able to control the vehicle in case of emergency but also a Tesla employee sitting in the passenger seat who can turn the vehicle off in case of an issue. Only select invited Tesla users were invited to test the robotaxi service in Austin.
Scaling a robotaxi business that could take on industry leader Waymo (GOOG, GOOGL) would take thousands of vehicles operating without safety operators, as well as creating the infrastructure to clean and service the robotaxis.
While some see the robotaxi launch as the start of a new era, others think the scale issue will be a big one.
"We believe the much better question ahead is on the path of scaling, which we believe will be long, and we caution against overoptimism," Barclays' Dan Levy wrote in a note to clients Monday morning. Levy has an Equal weight rating (the equivalent of Hold) and a $275 price target.
In addition to scale, there is a big concern over safety. Other players, like GM's Cruise (GM) and Uber (UBER), had to cease operations following high-profile accidents, with an Uber test leading to a pedestrian death.
Earlier on Monday Reuters reported that Tesla said answers to regulator NHTSA's questions regarding safety of its robotaxi operations was confidential business information, and should not be made public.
Nonetheless, Wall Street bulls were cheering Tesla's early success.
'We took two approximately 15 minute rides around Austin and the key takeaways are that it was a comfortable, safe, and personalized experience,' Wedbush analyst and Tesla bull Dan Ives wrote in a note published late Sunday. Ives has an Outperform rating on Tesla and a lofty $500 price target.
In a particularly tense moment, Ives said, the robotaxi drove up a hill on a narrow road with cars parked on both sides, oncoming traffic, and people opening their car doors into the road, but the robotaxi 'masterfully maneuvered with patience and safety among this chaos.'
The ride also lets users sync their Tesla accounts with the robotaxi, allowing streaming apps like Netflix, Spotify, Hulu, and Disney+ to load with users' content ready to be played, Ives said.
'The Robotaxis we experienced today were foundational, and there is a path for the future where these Robotaxis may also have Grok integration, interior customization, and a much more user-centric focus as there's no longer a need to focus on the driver experience,' Ives said.
Tesla hasn't revealed its next steps or when the general public will be allowed to summon a robotaxi in Austin. Musk has said he expects 'millions' of robotaxis to be driving around by the second half of 2026, but the CEO has a history of making highly speculative predictions that have not come to fruition.
Pras Subramanian is the lead auto reporter for Yahoo Finance. You can follow him on X and on Instagram.