Tesla‘s long-overdue robotaxi is finally hitting the streets this weekend, but the rollout may face some roadblocks.
The Elon Musk-led electric vehicle company is expected to roll out robotaxis in Austin, Texas, on June 22, with the first 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 to social media platform X last week.
Here’s what we know about the Tesla event so far.
When and where
The launch will include a limited number of Tesla vehicles debuting in Austin on June 22. The initial rides will be in the Model Y and not 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 test out the new service starting Sunday.
The rides will also occur in a geofenced area of the city and remote drivers will be monitoring as a backup.
Can Musk deliver on promises?
Musk has long touted a driverless robotaxi, and the pressure is on the billionaire to deliver on his promises. 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. At the time, Musk said the service would launch with 10 vehicles circulating Austin.
“It’s prudent for us to start with a small number, confirm that things are going well and then scale it up,” he told CNBC’s David Faber.
Wall Street analysts such as Wedbush’s Dan Ives believe robotaxis will usher in the “golden era of autonomous for Tesla” that could power its market capitalization to more than $2 trillion by the end of next year.
That’s about double its market value from Wednesday’s close.
“There will be many setbacks … but given its unmatched scale and scope globally we believe Tesla has the opportunity to own the autonomous market and down the road license its technology to other auto players both in the U.S. and around the globe,” he wrote in a note.
Regulatory hurdles and opposition
Tesla faces a bumpy road ahead, littered with federal regulatory hurdles and pushback from lawmakers.
On Wednesday, a group of Democratic lawmakers in Texas called on Tesla to push off its robotaxi launch until Sept. 1, when Texas rolls out a new slate of self-driving laws.
“We believe this is in the best interest of both public safety and building public transit operation,” the group said in a letter addressed to Tesla’s field quality director Eddie Gates. They also asked for “detailed information demonstrating that Tesla will be compliant with the new law” if it goes ahead with the launch.
Public safety advocates protested the launch in Austin earlier this month.
A group known as The Dawn Project, a tech safety organization that is 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 elements in the road.
“Any human … following the law would have stopped when they saw the school bus stopped with the lights flashing. They would have stopped,” Dawn Project founder Dan O’Dowd told CNBC’s “Squawk on the Street” Friday.
O’Dowd, who also runs Green Hills Software, a company that sells technology to Tesla competitors, told CNBC that the software is “nowhere near done” and shouldn’t be taking to the streets.
“This software does not know how to recognize a school bus,” he said.
Tesla’s FSD capabilities, which feature a standard FSD or FSD supervised, include automatic steering and parking, but have been connected to accidents and fatalities, according to data tracked by the National Highway Traffic Safety Administration.
Tesla year to date 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 major supporter of President Donald Trump, funneling hundreds of millions into his reelection campaign and later spearheading his Department of Government Efficiency effort aimed at cutting costs. He left the department at the end 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 relationship between Musk and Trump soured earlier this month after the tech titan berated the president’s spending bill on X, leading to a drastic selloff in the stock. He later apologized for his social media posts, saying some “went too far.”
The EV maker is also seeing a global sales decline weighing on key markets such as the U.S. and Europe. Vehicle sales in Europe tanked 49% from a year ago in April, while first-quarter deliveries dropped 13%.
The decline was tied to a combination of Musk’s politics and heightened competition in the EV market.
— CNBC’s Lora Kolodny contributed to this report.
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