Tesla, officially entered the autonomous ride-hailing race with the June 22, 2025 launch of its limited robotaxi service in Austin, Texas. While still invite-only and operating in a small geofenced area, this marks a major milestone for Tesla and its CEO, Elon Musk, who has long promised a future of self-driving cars.

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Launch Overview: Exclusive and Limited

Tesla’s initial rollout includes about 10 Model Y vehicles running Full Self-Driving (FSD) software, version 14 or higher. The service is confined to select neighborhoods like South Congress and Oltorf Street and is currently only accessible to invited guests such as influencers, shareholders, and analysts. General public access has not yet been granted.

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How the Robotaxi Works

• Booking: Rides are booked through the Tesla app or via the rear touchscreen in the vehicle.
• Cost: Each ride costs a flat $4.20.
• Hours: Operates daily from 6:00 a.m. to 12:00 a.m.
• Safety: A human monitor is in the passenger seat, equipped with a kill switch for emergencies.
• Restrictions: Rides are unavailable in bad weather and don’t cover the entire city.

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Technology Under the Hood

Tesla’s robotaxis run on a vision-only version of FSD, powered by the new AI5 chip. Unlike competitors such as Waymo or Zoox, Tesla’s cars do not use lidar or radar. This bold approach has drawn both praise and criticism.

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Positive Feedback

Early riders, including Wedbush analyst Dan Ives and influencer Sawyer Merritt, reported smooth and efficient rides. The cars reportedly handled narrow lanes and construction areas well.

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Safety Concerns

There have been minor issues. One rider noted the vehicle briefly exceeded the speed limit. Another clip showed a robotaxi swerving into the wrong lane before a safety monitor intervened. These incidents are now under review by the NHTSA, which has requested additional data from Tesla.

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Regulation and Legal Oversight

Texas will enforce new laws starting September 1, 2025, requiring autonomous vehicle operators to obtain permits and submit safety certifications. Tesla has partially complied, but the Texas DMV and NHTSA continue to review its operations.
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If regulators deem the service unsafe, they can revoke operating permits. Past incidents—like a Tesla FSD vehicle hitting a school bus—still weigh heavily in these evaluations.

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Future Plans: Expansion and the Cybercab

• Austin Fleet: Tesla plans to increase its Austin fleet to 50 vehicles by Q4 2025.
• California Launch: The company hopes to expand into California by early 2026.
• Cybercab: A dedicated robotaxi model, the Cybercab, is expected in 2026.
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Despite these ambitions, experts suggest full-scale deployment could take years due to software refinement and legal hurdles.

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Market Reaction

Following the launch, Tesla’s stock jumped nearly 10% on June 23, 2025. Analysts like Dan Ives estimate that a successful robotaxi rollout could add up to $1 trillion in market cap for Tesla by 2026.

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Competition

Tesla faces strong rivals:

• Waymo: Already operational in Austin and known for superior disengagement rates.
• Zoox and Baidu: Advancing in tech and pilot programs globally.

Social Media Sentiment

Public response is mixed. Posts on X range from enthusiasm ("civilization upgrade") to skepticism ("not ready for prime time"). Some users noted safety monitors and chase vehicles still present—evidence that Tesla isn’t fully autonomous yet.

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Consumer Takeaway

If you’re in Austin and receive an invite, the Tesla robotaxi is worth trying for the novelty. However, limitations remain:

• It’s not fully autonomous.
• It’s not available to the general public.
• It’s confined to a small area.
• Safety concerns are still being addressed.

For now, Tesla’s service serves more as a proof-of-concept than a practical alternative to Uber or Waymo. But with planned expansions and a dedicated Cybercab model in the works, Tesla is betting big on an autonomous future.
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Stay tuned for updates and potential public rollouts in other cities by visiting Tesla’s official channels.

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Watch the full video here:

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