Tesla Inc. is rolling out its first robotaxis on the streets of Austin after almost a decade of hype from Elon Musk, kicking off a precarious new era for the carmaker.
The launch of a driverless taxi service Sunday is set to begin modestly, with a handful of vehicles in limited areas of the city. Tesla hand-picked initial riders who are expected to offer feedback on the experience, so the general public will still have to wait.
The low-key rollout has nonetheless been highly anticipated by investors, who are counting on the new business line to revive a company battered by flagging sales and a consumer backlash against Musk. The Tesla chief executive officer is betting the company’s future on autonomous driving, artificial intelligence and humanoid robots — buzzy but still largely unproven markets.
“This is the first true test,” Gene Munster, managing partner of Deepwater Asset Management, said in an interview. “Anything that happens will be amplified, especially the negative. There’s a lot at stake.”
Tesla has ramped up testing recently in the Texas state capital, where Model Y SUVs with manufacturer plates have been spotted regularly in the south and southeast portions of the city. Musk recently promoted a video on social media of one of its vehicles driving in Austin with nobody behind the wheel.
Some details of the launch emerged in recent days after several social-media users — known for promoting Tesla — revealed that they were selected for early access to a new robotaxi app and the ride-hailing service.
According to the use parameters posted by one account, robotaxis will be available between 6 a.m. and midnight every day within unspecified geofenced areas of the city, not including the airport. The service may be limited or unavailable in foul weather. A “safety monitor” will be sitting in the front passenger seat for rides during the early access period.
Musk has said Tesla would initially roll out 10 to 20 vehicles before expanding to a thousand within a few months, and later introducing a purpose-built Cybercab with no pedals or steering wheel.
The CEO has a history of overpromising in the area of autonomy. After hinting at the possibility of an autonomous-car service in a business plan in 2016, he said three years later that Tesla customers would be able to utilize their vehicles as robotaxis by 2020.
Tesla has long offered a system called Full Self Driving that, despite the name, requires continual driver supervision and doesn’t make vehicles autonomous. The company has said it will operate its robotaxi network using an “unsupervised” version of the software that will not require a human driver to monitor.
Safety is a crucial factor in driverless car operations. Incidents that injure or kill people can bring regulatory crackdowns and negative attention to companies. Cruise, the now-defunct autonomy business of General Motors Co., grounded its fleet in late 2023 and had its operating license suspended in California following an accident that injured a pedestrian.
Uber Technologies Inc. ceased testing self-driving vehicles after one of its SUVs struck and killed a pedestrian in Arizona in 2018. Less than three years later, the company agreed to sell its self-driving business.
Austin has become a hot spot for autonomous vehicle operations. Waymo, which is owned by Google parent Alphabet Inc., is scaling up in the city through a partnership with Uber. Amazon.com Inc.’s Zoox is also testing there.
In Texas, Tesla faces few restrictions to operate autonomous vehicles. Driverless vehicles are required to be equipped with cameras, have insurance and follow traffic rules. A rideshare license in not currently required.
At the federal level, authorities are taking steps to ease the deployment of autonomous vehicles without driver controls like steering wheels or pedals. The National Highway Traffic Safety Administration said this month that it will streamline the process to get an exemption for such vehicles, which under current policy has resulted in lengthy processing times that can last years.
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