Tesla (TSLA, Financial) is accelerating its Robotaxi business expansion as competition in autonomous driving intensifies. The company has applied to test and operate its Robotaxi services in Arizona, including both with and without safety drivers. Approval could mark a significant step in commercializing Robotaxi services across multiple U.S. cities. Tesla's move is seen as an effort to catch up with Waymo, a leader in the autonomous vehicle market and a subsidiary of Alphabet (GOOGL, GOOG), which launched driverless Robotaxi services in Phoenix back in 2020.
Unlike many companies relying on costly LiDAR and high-precision maps, Tesla focuses on camera-based vision systems, which CEO Elon Musk believes are more commercially viable. This expansion in Arizona coincides with initial Robotaxi testing in Austin, Texas, where Tesla has been using Model Y SUVs equipped with the latest autonomous systems since June. However, these vehicles are still in the semi-autonomous phase, with a Tesla employee present to oversee operations.
Despite challenges, including safety concerns and regulatory scrutiny, Musk is determined to expand Robotaxi services, potentially reaching California's San Francisco Bay Area soon. Tesla's upcoming Q2 2025 earnings call is expected to highlight Robotaxi developments and future plans.