Tesla shares are soaring in the wake of its low-key but apparently successful launch of its Robotaxi service in Austin, Texas on Sunday.

“Super congratulations to the @Tesla_AI software & chip design teams on a successful @Robotaxi launch!! Culmination of a decade of hard work. Both the AI chip and software teams were built from scratch within Tesla,” CEO Elon Musk said in a post.

Analysts Give their Take

Tesla cheerleader Dan Ives of Wedbush was gushy. He said it marks the start of Tesla’s “golden age” and reaffirmed his “Outperform” rating and $500 price target.

Others were more muted in their praise.

“From our conversations with investors, feedback has been mostly neutral,” RBC Capital Markets analyst Tom Narayan said.

UBS analyst Joseph Spak bumped his price target to $215 from $190 but kept a “Sell” rating, writing, “The robotaxi opportunity… is already priced into shares.”

Guggenheim said it was “a relatively uneventful Sunday in Austin, and uneventful is a good outcome.” The company kept its “Sell” rating and $175 price target, citing valuation.

Scaling the service is now crucial and there is considerable execution risk. "We believe the much better question ahead is on the path of scaling, which we believe will be long, and we caution against overoptimism," Barclays analyst Dan Levy wrote in a note to clients. Levy has an Equal weight rating and a $275 price target.

Still a Long Way to Travel for Tesla’s FSD

Tesla still has lot of catching up to do with rivals. Alphabet-backed Waymo has is delivering more than 250,000 driverless rides per week, having just surpassed 10 million trips last month. Baidu’s Apollo Go has surpassed 11 million trips already.

Which puts Tesla’s handful of journeys on Sunday somewhat in the shade. 

Meanwhile there were reports of some Tesla Robotaxis violating traffic laws in Austin. Infractions such as brief lane drift, speeding near pedestrians were caught on video. The National Highway Traffic Safety Administration is seeking information from Tesla about what was filmed - it may not signify a long-term problem but it does indicate that even with a relatively small and controlled debut Tesla is facing a mountain to scale this up without incurring more scrutiny and problems.

It shows drivers and investors may be right to be cautious about Tesla’s Full Self Driving technology. The tech being trialled in Austin, FSD Unsupervised, is not currently on sale to general Tesla owners.