Tesla shares jumped over 9% on Monday after the electric vehicle maker started testing its long-awaited robo-taxi service, a key step toward proving the technology that CEO Elon Musk has for years touted as a crucial driver of its lofty valuation.
The car maker deployed a small fleet of self-driving taxis in Austin, Texas, on Sunday, marking the first time its cars have carried paying passengers without human drivers. The rides were being offered for a flat fee of US$4.20 in a limited zone.
The trial’s success is crucial for Tesla as Musk has pivoted the company to self-driving cars and robots, shelving plans for mass-market dominance in the EV space as Chinese competition heats up and demand slows for its ageing line-up of models.
Tesla told US regulators on Monday that its answers on the safety of the robo-taxi deployment are confidential business information and should not be made public, after the National Highway Traffic Safety Administration said it was reviewing answers given in response to its questions about the safety of the robo-taxi in poor weather among numerous issues.
“It was a comfortable, safe and personalised experience,” said Wedbush Securities analyst Dan Ives, who took multiple robo-taxi rides on Sunday and has long been a Tesla bull.
“There was a moment where we drove up a narrow road going up a hill with cars parked on both sides with oncoming traffic and people opening their car doors into the road and the robo-taxi masterfully manoeuvred with patience and safety.”
Many social media influencers also posted videos of their first rides on X, showing the cars navigating busy city streets by slowing down and making room for incoming traffic.
Tightly controlled
Still, the tightly controlled trial — with about 10 vehicles and front-seat riders acting as “safety monitors” — is just the first step in what could be a years-long process of scaling up the service, according to some industry experts.
Tesla, as well as rivals including Google-backed Waymo, have faced federal investigations and recalls following collisions.
Industry experts have questioned the efficacy of Tesla’s self-driving technology that depends mostly on cameras and AI, without redundant sensors such as lidar and radar, claiming fog, heavy rain and glaring sunlight can hamper safety.
Read: BYD flying high while Tesla flounders
The company will also have to navigate a new Texas law taking effect on 1 September that requires a state permit for self-driving vehicles and reflects bipartisan calls for a cautious roll-out. — Aditya Soni and Juby Babu, (c) 2025 Reuters
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