Tesla (TSLA, Financial) is set to launch its autonomous taxi service in Austin, Texas, marking a significant step in its innovative business model. The initial rollout will feature 10 to 20 Model Y vehicles equipped with the latest Full Self-Driving (FSD) software. Tesla CEO Elon Musk outlined a phased expansion plan, aiming to grow the fleet to millions by the end of 2026. To support this, Tesla has already deployed around 300 test operators in Austin, some of whom have transitioned to remote monitoring roles.
Users can book rides through Tesla's app, similar to Uber (UBER) or Lyft (LYFT), where the system dispatches nearby autonomous vehicles. The service relies entirely on Tesla's vision-based FSD system, which has undergone multiple optimizations. Although Musk envisions a version needing no human intervention, the current phase includes safety drivers and remote support for stability.
Tesla plans to expand the service to other U.S. cities and introduce an Airbnb-like model, allowing private owners to join the robotaxi network for earnings. ARK Invest analyst Akaash TK suggests that if Tesla meets its targets, it could operate around 100,000 vehicles by year-end. The Austin launch will be crucial in proving its commercial viability.
