Tesla is set to launch a test of its long-promised robotaxi service in Austin, Texas, by the end of June, CEO Elon Musk confirmed Tuesday, despite ongoing safety concerns raised by U.S. regulators.
The electric vehicle maker plans to deploy approximately 10 self-driving cars in selected safe areas of Austin, with plans to scale up to around 1,000 vehicles in the coming months, Musk told CNBC.
“We are actually going to deploy not to the entire Austin region, but only the parts that are the safest,” he said.
Tesla faces challenges as global sales decline amid rising competition and backlash over Musk’s political views and his involvement with former President Donald Trump. Musk said he will reduce his work with Trump to focus more on Tesla.
A successful robotaxi pilot is crucial for Tesla, as Musk shifts the company’s focus from developing a new, affordable electric vehicle platform toward launching the robotaxi service and Optimus humanoid robots. Much of Tesla’s market valuation depends on the success of this strategy.
“The only things that matter in the long term are autonomy and Optimus,” Musk said.
Commercializing autonomous vehicle technology remains difficult due to strict regulations and high costs, causing many companies to exit the market. Competitors like Alphabet’s Waymo face increased regulatory scrutiny.
The National Highway Traffic Safety Administration (NHTSA) has been investigating incidents involving Tesla’s Full Self-Driving (FSD) software in low-visibility conditions since October. Last week, the agency requested information from Tesla regarding the robotaxi launch to evaluate vehicle performance in poor weather.
Musk also disclosed Tesla is negotiating with major automakers to license the FSD software, which will underpin its robotaxi fleet.
In related AI developments, Musk’s xAI startup is expanding data center capacity to train advanced models, including the “Colossus” supercomputer cluster in Memphis, Tennessee, touted as the world’s largest.
xAI plans to deploy one million Nvidia (NVDA.O) Blackwell chips at a new Memphis facility. Musk said, “So long as Nvidia is better than what we make, we’ll keep buying from Nvidia.”
Musk, who merged xAI with his social media platform X in March, said a merger between Tesla and xAI is not currently under consideration but is “not out of the question,” pending shareholder approval.
