Tesla shares rise as Musk sets ‘tentative’ date for robotaxi launch

Tesla shares rose over 5% yesterday after CEO Elon Musk set June 22 as the “tentative” date for robotaxi launch. The shares are set to open higher today also, after Musk expressed regret over some of his tweets targeting President Donald Trump.

In a tweet, Musk said that the robotaxi launch is “tentatively” set for June 22. In the same tweet, the billionaire said, “We are being super paranoid about safety, so the date could shift.” He added that the “First Tesla that drives itself from factory end of line all the way to a customer house is June 28,” which happens to be his birthday.

Musk sets tentative date for Tesla robotaxi launch

At the core of Tesla’s robotaxi initiative is its Full Self-Driving (FSD) software, which relies primarily on cameras and artificial intelligence to navigate without human intervention. Unlike some competitors that utilize a broader suite of sensors, including lidar and radar, Tesla’s approach emphasizes a camera-only system, a design choice the company believes offers a cost advantage and scalability. However, the camera-only approach has looked vulnerable in some weather conditions.

Initially, the service is expected to be a controlled pilot, starting with a limited fleet of Model Y vehicles operating within geofenced areas of Austin. These vehicles will be remotely monitored, with an emphasis on safety as Tesla aims for an eventual expansion to other cities and a larger fleet. Musk’s long-term vision is ambitious, projecting a rapid scaling to “hundreds of thousands” of robotaxis by the end of next year and potentially over a million by the end of 2026.

Tesla would compete with Waymo in Austin

Meanwhile, Tesla’s robotaxi would compete with Waymo’s robotaxis in Austin. The Google-backed company has a partnership with Uber in Austin, and it would be a direct face-off between the two tech giants.

The robotaxi launch would be a key test of Tesla’s FSD, which has faced criticism in the past as it’s not fully autonomous, as the name suggests. Also, given the slowdown in its automotive business, a successful launch of robotaxis becomes all the more crucial for Tesla.

Tesla reported a fall in Q1 revenues

Tesla’s Q1 revenues plummeted 9% YoY to $19.34 billion and fell well short of the $21.1 billion that analysts were expecting. The fall was revenues is not surprising as the company’s shipments had tanked 13% in the quarter. Moreover, Tesla has been lowering car prices to spur sales, which has negatively impacted its average selling prices. Overall, Tesla’s automotive revenues fell 20% in the first quarter.

The company’s per-share earnings came in at 27 cents, which was also below the 39 cents that analysts were modelling.

Analysts have tempered their expectations for Tesla’s Q2 deliveries. The sales from its China Gigafactory have fallen in the first two months of this quarter, extending the losing streak to eight consecutive months. The factory not only makes cars for the domestic Chinese market by also for exports to Europe.

The European market has been particularly challenging for Tesla this year, and sales have fallen sharply in most markets. Tesla has been offering higher discounts and 0% interest loans, which could stimulate demand and boost deliveries. However, despite these measures, analysts expect its deliveries to fall YoY in Q2, even as they are predicting them to come higher than Q1.

China’s EV price war has escalated

Along with tepid sales, Tesla is also battling a worsening price war in China. Last month, Chinese EV giant BYD announced that it is cutting prices on 22 of its models until the end of this quarter. These include both battery electric vehicles (BEVs) and plug-in hybrids (PHEVs). The price cuts are quite aggressive, and the company slashed the price of its Seagull hatchback by 20%. The model, which is the cheapest from BYD, would now cost just about 55,800 yuan (around $7,780). The biggest cut was for the Seal dual-motor hybrid sedan, whose price has been slashed by 34%.

While BYD has been gaining market share in China, the company is also giving a tough fight to Tesla in global markets.

In April, BYD sold more BEVs than Tesla in Europe. While the Elon Musk-run company has been in Europe for quite some time now and also has one of its Gigafactories in Berlin, BYD entered the region only in late 2022. Moreover, BYD cars face tariffs in the EU, while the cars built by Tesla at its Germany Gigafactory are exempt from these tariffs.

Tesla has faced a backlash in Europe

Despite having an advantage over BYD, Tesla was outsold by BYD in Europe. This is predominantly due to the cheap price at which BYD sells its cars. Also, Tesla is facing a lot of backlash in Europe over Musk’s support for far-right candidates.

In a related move, 10 drivers in Paris filed a lawsuit against Tesla, alleging that the perception about its cars becoming political symbols “prevents them from fully enjoying their car.”

Patrick Klugman, one of the lawyers working on the case, told Agence France-Presse: “The situation is both unexpected and impossible for French Tesla owners.” He added, “we believe that Mr Musk owes these buyers the peaceful possession of the thing sold”, he added.

Musk backs down in his feud with Trump

Meanwhile, after a bitter breakup with President Trump, Musk has expressed “regret” about some of his posts targeting Trump without specifying which ones. While the feud started with Musk criticizing Trump’s tax and spending bill, it soon got ugly. The Tesla CEO claimed that President Trump’s name is mentioned in the Jeffrey Epstein files and boasted that if not for him, Trump wouldn’t have won in the 2024 elections.

Trump responded sharply, accusing Musk of going “crazy” and threatening to terminate government contracts and subsidies for Musk’s companies like SpaceX and Tesla.

It’s quite rare for Musk to apologize for his tweets. However, markets see it as a sign that the bitterness between Musk and Trump has somewhat eased, even though most agree that the relationship between the two might never be the same again.