Tesla Launches Robotaxi Service in Austin, Sparks Market Optimism

Tesla is preparing to launch its highly anticipated robotaxi service in Austin, Texas by the end of June, starting with approximately 10 vehicles equipped with Full Self-Driving (FSD) technology, which uses advanced AI and machine learning to interpret the environment through cameras alone. Despite near-term economic challenges and lowered 2025 earnings estimates, Tesla's stock has surged over 50% since April, driven largely by optimism surrounding the robotaxi rollout and CEO Elon Musk's increased focus on the company. Analyst Andres Sheppard from Cantor Fitzgerald and Morgan Stanley both maintain 'Overweight' ratings on Tesla, with price targets of $355 and $410 respectively, citing Tesla's strengths in electric vehicles, autonomous driving, robotics, and energy businesses. Cathie Wood of Ark Invest remains bullish, forecasting Tesla's stock could reach $2,600 in five years based on the robotaxi's potential, though she acknowledges Tesla trails autonomous driving leader Waymo, which already operates over 250,000 paid weekly rides. Tesla plans rapid expansion of the robotaxi service to compete with Waymo, but the success of this venture will be crucial to the company's future growth and stock performance. Additionally, Morgan Stanley highlights the importance of rare earth metals supply chains for Tesla’s humanoid robots and AI developments, noting significant supply risks due to China's dominance in rare earth mining and refining.