Reports suggest that Tesla is aiming for a launch of its robotaxi service in Austin, Texas, potentially as early as June 12th. This follows earlier statements from CEO Elon Musk targeting a launch in Austin by the end of June. This move represents a significant step for Tesla, particularly as Musk has increasingly shifted the company’s focus towards autonomous vehicles and away from mass-market electric vehicle sales. Much of Tesla’s valuation is reportedly tied to the success of this robotaxi venture.
The Austin Starting Point and Texas Regulations
Austin appears to be the chosen initial location for several reasons, notably the regulatory environment in Texas. State law preempts local authority when it comes to regulating autonomous vehicles (AVs). Passed in 2017 and amended in 2021, Texas state law removed regulatory power from local municipalities and placed oversight in the hands of the state government, establishing uniform rules for AVs across Texas. The state takes a hands-off approach, allowing AV companies free access to public streets provided they are registered and insured and equipped to record crash data, similar to human-driven cars. No state agency is responsible for issuing permits or overseeing driverless taxi services, and state law explicitly forbids cities and counties from enacting their own regulations. This aligns with a stated legislative goal to promote industry growth in a competitive marketplace and avoid barriers to entry.
Despite the lack of regulatory power, Austin city officials have engaged with AV companies operating in the city, offering knowledge of the local transportation network to help operations. However, officials have expressed frustration at their inability to impose rules on private companies using public roads as testing grounds. The city has received formal complaints from residents and first responders regarding incidents involving AVs, though these reports are not validated and may not capture all events. Austin officials have provided Tesla with information on local procedures, maps, and traffic rules.
What the Launch Could Look Like
According to Musk’s previous comments, the Austin service will initially feature unsupervised Full Self-Driving (FSD), meaning there will be “no one in the car”. The initial deployment is expected to be a small fleet, estimated at around 10 to 20 Model Y vehicles. There are suggestions the service will initially be restricted to a geofenced area within the city. While Tesla aims to expand quickly, it’s reported that the Austin launch may utilise “heavy teleoperation,” though the specific level hasn’t been confirmed.
Musk has also outlined a broader vision for the service, describing it as “kind of like Airbnb”. Eventually, he envisions Tesla owners being able to add or subtract their vehicles from the robotaxi fleet when they are not using them, potentially starting next year.
Navigating a Competitive Landscape
Tesla is entering a market where other players, particularly Waymo (an Alphabet subsidiary), already have a significant head start. Waymo began as a Google project in 2009 and has been offering paid, driverless rides since March 2022. By Q1 2025, Waymo was performing over 250,000 weekly paid rides, a fivefold increase from the previous year. Waymo currently operates autonomously in four major cities with expansion planned for two more. Crucially, Waymo’s technology has achieved Level 4 autonomy, enabling driverless operations, while Tesla’s FSD is currently considered Level 2, still requiring human supervision. Even Tesla’s head of self-driving has reportedly admitted that Waymo is “probably a couple of years ahead”.
Waymo’s expansion has been gradual, which is seen by some as a safer approach, especially considering potential regulatory hurdles and liability issues arising from accidents. In contrast, Musk claimed in late May 2025 that Tesla had only begun testing its driverless service on Austin public streets in the “past several days”. While he stated there had been no incidents during this short testing period and claimed it was “a month ahead of schedule,” this limited testing window has been met with some skepticism. Industry observers note that Waymo conducted months of testing, both with and without safety drivers, before launching commercially in Austin earlier in 2025.
Challenges and Skepticism
The technical leap required for Tesla’s FSD to transition from Level 2 (supervised) to a truly unsupervised, reliable Level 4 or 5 system for robotaxi operation is substantial. Critics point to inconsistencies in the current FSD system, citing instances where intervention is necessary to avoid awkward or potentially dangerous situations. Some express concern about the system’s ability to handle unexpected anomalies without relying on technology like Lidar.
Legal experts note that deploying truly driverless taxis would place crash liability squarely on Tesla, a shift from instances involving driver-assistance systems where the company has sometimes attributed blame to the customer for not supervising. Austin city officials’ inability to regulate the service adds another layer of complexity, leaving them reliant on the company’s own safety measures.
While Cathie Wood of Ark Invest maintains a highly optimistic price target for Tesla’s stock, largely based on the success of the robotaxi business, others are more cautious. Morningstar, for instance, maintains a much lower fair value estimate and predicts a multicity robotaxi launch won’t occur until 2028, suggesting the current stock price reflects significant optimism about the service launching much sooner. They, along with others, highlight the significant challenge Tesla faces in not only scaling Robotaxi quickly but also making it profitable, something Waymo has yet to publicly demonstrate despite its lead.
Ultimately, Tesla’s planned robotaxi launch in Austin is a highly anticipated event with potentially major implications for the company and the future of transportation. However, significant technical, safety, and operational hurdles remain, and how quickly Tesla can overcome them compared to established rivals like Waymo is the key question.
