Tesla (TSLA) has received approval from the Arizona Department of Transportation to begin testing autonomous robotaxi vehicles in the Phoenix Metro area. The trials will require a safety driver inside the vehicle, and the company has not yet disclosed when the program will begin or how long it will last.
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Tesla first applied for a permit in June after launching a small pilot program in Austin, Texas, where about a dozen vehicles operated with safety monitors in the front passenger seat. With the new approval, Arizona becomes the next key site for the company as it expands its autonomous ride-sharing plans.
Meanwhile, TSLA shares have risen 2.21% in Friday’s trading, closing at $426.07.
Arizona as a Test Market
Arizona has built a reputation as a favorable state for autonomous vehicle trials. Companies such as Waymo, a subsidiary of Alphabet (GOOG) (GOOGL), and Cruise, a part of General Motors (GM), already operate in the region. The local market gives Tesla both a competitive and a technical opportunity, since Phoenix offers wide roads and mixed traffic conditions.
At this stage, Tesla can only test its vehicles with human oversight. To run a commercial service without safety drivers, the company would need additional clearance. That step has not yet been granted. Chief Executive Elon Musk has said Tesla plans to roll out a ride-hailing robotaxi service to cover about half of the United States by the end of 2025. The Arizona trials fit into that timeline and add another state to Tesla’s testing map.
While the company has not shared exact numbers on vehicles or routes for the Phoenix program, the move signals that Tesla is preparing its Full Self Driving software for larger-scale deployment.
Is Tesla a Buy, Sell, or Hold?
Turning our attention to the Street’s analysts, Tesla is still considered a Hold based on 34 ratings assigned by analysts in the last three months. The average price target for TSLA stock is $321.86, implying a 24.46% downside from the current price.
