Tesla launches Robotaxi service in Texas, can it tap into the trillion-dollar market?

According to Zhitong Finance APP, Tesla (TSLA.US) has launched a limited edition autonomous taxi service in Austin, Texas, marking a significant progress towards the company's goal of becoming a leader in the autonomous driving field. Images of these autonomous vehicles on the road have been posted on social media accounts.

It is noteworthy that the first batch of vehicles is strictly controlled and limited to invited users, primarily targeting selected Tesla enthusiasts, investors, and social media influencers.

The service will feature the Model Y equipped with Tesla's latest Full Self-Driving (FSD) software. These vehicles utilize a camera-based sensor system powered by artificial intelligence, differentiating them from most competitors that use additional sensors such as LiDAR and radar.

Despite earlier promises of achieving fully autonomous driving, Tesla has chosen to equip the front passenger seat with a safety operator or company employee during the initial operational phase, while the driver's seat will remain unoccupied during driving.

CEO Elon Musk previously revealed to reporters that there may be fewer than twelve vehicles on the road in Austin on Sunday, and their operation will be strictly limited to specific geofenced areas, highlighting the company's cautious approach.

On the eve of the service launch, Texas Governor Greg Abbott signed a bill requiring autonomous vehicles to obtain operational permits. This move puts Tesla in a position to choose: either continue with an operational plan that may need to be terminated by September 1, or delay implementation.

The new regulations require autonomous operators to obtain approval from the Texas Department of Motor Vehicles before deploying driverless vehicles, and authorize the state government to revoke permits if autonomous vehicles are deemed a threat to public safety.

Last week, Wedbush Securities analyst Dan Ives reiterated that the company estimates that the artificial intelligence and autonomous driving sectors alone could create at least $1 trillion in market value for Tesla.

"We fully expect that under the Trump administration, these key initiatives will accelerate—federal regulatory hurdles that Musk's team has faced in the full self-driving space over the past few years will be significantly cleared during Trump's tenure. Although Musk's relationship with Trump has created dramatic scenes, ultimately Trump wants the U.S. to maintain its lead over China in this AI arms race, and autonomous driving is a key factor in determining the outcome of AI... Tesla will play an important role in the autonomous taxi sector," he emphasized