Kara Carlson
4 min read
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(Bloomberg) -- Tesla Inc. shares climbed after the automaker rolled out its long-promised driverless taxi service to a handful of riders, a modest debut for what Elon Musk sees as a transformative new business line.
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The first robotaxi trips were limited to a narrow portion of Tesla’s hometown of Austin on Sunday, with an employee sitting in the front passenger seat of each vehicle to monitor for safety. The carmaker hand-picked a friendly group of retail investors and social-media influencers to serve as initial riders and live-stream their trips.
In one video, Herbert Ong, who runs a fan account, marveled over the speed of the vehicle and its ability to park autonomously. Another influencer with the X handle @BLKMDL3 deemed his trip smoother than with a human driver. Sawyer Merritt, a Tesla investor who runs an account focused on the company, called the experience “awesome.”
With no kickoff event and little in the way of formal announcements, Tesla relied largely on word of mouth and media coverage ahead of the robotaxi launch. The unveiling was uncharacteristically low-key for a company that held a “Cyber Rodeo” to mark its Texas factory opening in 2022 and an invite-only party last year near Hollywood to unveil autonomous vehicle prototypes.
While Musk has cautioned that autonomy is unlikely to “move the financial needle” at Tesla for at least another year, progress toward getting the service started has boosted the company’s shares. The stock jumped 8.2% — the biggest gain in two months — to close regular trading in New York on Monday at $348.68.
Musk has been reorienting the carmaker around still-unproven technologies including self-driving vehicles and humanoid robots. Some investors are counting on new business segments to revive Tesla from a vehicle sales slump and consumer backlash against its chief executive officer. The company’s shares are still down 20% this year.
“While Tesla appears to be well positioned, we believe the opportunity is already priced into the stock,” Joseph Spak, a UBS Group AG analyst with a sell rating on the shares, wrote in a report Monday. He raised his price target to $215, well short of its close at $322.16 last week.
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Videos of the robotaxi launch posted Sunday were mostly mundane, showing Model Y SUVs driving short distances, navigating intersections, avoiding pedestrians and parking — all with no one sitting in the driver’s seat. The debut was “largely uneventful” and free of major missteps, with the start of revenue service marking a “critical milestone” for bulls in the stock, Barclays analyst Dan Levy said in a note.
