Charged: Tesla rolls out robotaxi service in Austin

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From the hotly-debated high-flier Tesla (TSLA), Wall Street’s newest darling Rivian (RIVN), traditional-stalwarts turned EV-upstarts GM (GM) and Ford (F) to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with “Charged,” a weekly recap of the top stories and expert calls in the sector.

ROBOTAXIS: Over the weekend, Tesla rolled out its robotaxi service to some users following nearly a decade of hype, with initial trips limited to a portion of the car maker’s hometown of Austin, Texas. Meanwhile, shares of Tesla surged in Monday monring trading, as CEO Elon Musk said in a post on X, formerly Twitter, “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.”

In other robotaxi news, Amazon’s (AMZN) Zoox announced last week that it had opened the “first-ever serial production facility for purpose-built robotaxis in the U.S.” Zoox said the facility will be utilized for planned growth and robotaxi services at Zoox across multiple markets, starting with Las Vegas, followed by San Francisco, and with additional locations such as Austin and Miami expected to follow in the next few years. Zoox added, “This is our second vehicle production facility in the Bay Area. Located in Hayward, California, the facility spans 220,000 square feet, equivalent to 3 1/2 American football fields. Our other assembly facility, located in Fremont, California, has evolved into a dedicated facility for the Zoox retrofitted testing fleet and for sensor pod configuration. On this currently installed line and once at full scale, Zoox has the capacity to assemble more than 10,000 robotaxis a year. The number of Zoox robotaxis we produce will grow and scale to match the demand of our commercial service as needed.”

GIGAFACTORY: Last Tuesday, Business Insider’s Grace Kay reported that Tesla intends to pause production at Gigafactory Texas, where it produces Model Y and Cybertruck vehicles, over the week of July 4. This will mark at least the third such shutdown in a year, Kay noted. According to a person familiar with the matter, the shutdown will begin the week of June 30, with production resuming the following week, allowing Tesla to perform maintenance on production lines.

SHANGHAI BATTERY STORAGE: Tesla’s first China grid-scale battery storage solutions using megapack batteries will be located in Shanghai, Reuters reported late last week, citing local media Yicai. The deal was signed between Tesla, China Kangfu, International Leasing Co, and Shanghai local government and involved an investment of $556.8M.

Q2 DELIVERIES: Echoing a similar sentiment from Wells Fargo, Barclays expects Tesla to report Q2 deliveries of 375,000 units, down 10% year-over-year and below the consensus estimate of 400,000. However, the miss may be discounted in the shares given the company’s “deemphasized fundamentals,” the analyst tells investors in a research note. Barclays believes Tesla’s 2025 volume is on track to be “more significantly negative,” but adds the new model is an “x factor.” The Tesla narrative has increasingly turned to the robotaxi, with investors likely more focused on the planned June 22 launch and the company’s path to scaling autonomous vehicles than on Q2 deliveries and overall fundamentals, contends the firm. It keeps an Equal Weight rating on Tesla with a $275 price target.

AI FUTURE: Meanwhile, Wedbush said that “the golden era of autonomous” for Tesla would officially kick off on Sunday in Austin as the special invites went out giving selected Tesla users permission to use the Model Y Robotaxi service starting on Sunday. While the Austin launch will start off small with roughly 20 Model Y vehicles in this “geofence” service around Austin this service should steadily ramp throughout the summer in Austin and it’s Wedbush’s view Tesla will launch and scale its robotaxi service to roughly 25 cities in the U.S. over the next year. The firm views this autonomous chapter as one of the most important for Musk and Tesla in its history as a company as it believes the AI future at Tesla is worth $1T to the valuation alone over the next few years. The firm maintains an Outperform rating on the shares with a price target of $500.

Click here to check out Tesla’s recent Media Buzz Sentiment as measured by TipRanks.

GOLDMAN UPGRADES NIO: Last week, Goldman Sachs upgraded Nio (NIO) to Neutral from Sell with a price target of $3.80, up from $3.70. The firm believes management’s cost reduction efforts will help improve the company’s profit levels over the next three years by 4%-10%. Nio has been focusing on cost reduction through a series of cost control and efficiency improvement measures since March, and the measures should start showing positive impact on costs and profits starting from Q3, the analyst tells investors in a research note. Goldman, however, remains “relatively more conservative” on Nio’s fiscal 2025 sales volume compared to management’s target, largely due to the ongoing industry competitive intensity and overall demand outlook.