Tesla’s much-hyped robotaxi service launched in Austin on Sunday, but with Tesla employees in the passenger seat due to safety concerns.

According to an announcement reported by invite-only passengers, safety drivers will be on board the Model Y cars, with the ability to steer or stop the vehicles if needed. Rides will also reportedly be limited to 6 am to midnight and operate within a restricted area of Downtown Austin in order to avoid complex and difficult intersections.

The cars will be running a new version of Tesla's FSD (Full Self-Driving) Unsupervised software, which relies on eight external cameras attached around the vehicle. That’s unlike Waymo’s robotaxis, which already operate in Austin and have multiple lidar sensors, six radars, and 29 cameras that protrude off the vehicles. Tesla rides will be unavailable in inclement weather as rain can obscure some of its cameras.

The Tesla fleet will start out small and be open only to invited passengers using an app. In an interview with CNBC in May, CEO Elon Musk said the Austin robotaxi service will start with around 10 vehicles before expanding to "thousands" of vehicles, should the launch go smoothly. Musk said Tesla will bring its robotaxis to Los Angeles and San Francisco after the Austin debut.

On Sunday, Musk offered some congratulations on the launch.

"Super congratulations to the @Tesla_AI software & chip design teams on a successful @Robotaxi launch!!" Musk wrote on social platform X. "Culmination of a decade of hard work. Both the AI chip and software teams were built from scratch within Tesla."

Last week, state lawmakers called on Tesla to pause its robotaxi plans in Austin. State Sen. Sarah Eckhardt and six other Texas Democrats urged Tesla to wait until September, when a new state law takes effect.

Under that law, autonomous vehicles will have to be able to comply with traffic laws, and they must have a recording device on board. They also will need to be capable of minimizing risk if the automated driving system breaks.

Additionally, operators must submit a “First Responder Interaction Plan” to the Texas Department of Public Safety, detailing how first responders should interact with the autonomous vehicles, including how to communicate with fleet support, safely remove or tow vehicles, and recognize whether a vehicles is being operated with the automated driving system engaged.

Musk bets cabs will give Tesla a lift after boycotts and sales plunge

Musk promised in 2019 that driverless Tesla robotaxis would be on the road “next year,” but it didn’t happen. A year later, he promised to deliver them the next year, but that didn’t happen either.

Despite the empty pledges the promises kept coming. Last year in January, Musk said, “Next year for sure, we’ll have over a million robotaxis.”

The stakes couldn't be higher, nor the challenges.

While Musk was making those “next year” promises, rival Waymo was busy deploying driverless taxis in Los Angeles, San Diego, Austin, and other cities by using a different technology that allowed it to get to market faster. It just completed its 10 millionth paid ride.

Boycotts related to Musk's politics have tanked Tesla's sales. Rival electric vehicle makers with newly competitive models have stolen market share. And investors are on edge after a $150 billion stock wipeout when Musk picked a social media fight with President Donald Trump, who was overseeing federal car regulators who could make the robotaxi rollout much more difficult. The stock has recovered somewhat after Musk said he regretted some of his remarks.

Tesla shareholders have stood by Musk over the years because he’s defied the odds by building a successful standalone electric vehicle company — self-driving car promises aside — and making them a lot of money in the process. A decade ago, Tesla shares traded for around $18. The shares closed Friday at $322.

Some Musk watchers on Wall Street are skeptical.

“How quickly can he expand the fleet?” asks Garrett Nelson, an analyst at CFRA. “We're talking maybe a dozen vehicles initially. It's very small."

Morningstar's Seth Goldstein says Musk is being classic Musk: Promising too much, too quickly.

“When anyone in Austin can download the app and use a robotaxi, that will be a success, but I don't think that will happen until 2028," he says. “Testing is going to take a while.”

Musk's tendency to push up the stock high with a bit of hyperbole is well known among investors.

In 2018, he told Tesla stockholders he had “funding secured” to buy all their shares at a massive premium and take the company private. But he not only lacked a written commitment from financiers, according to federal stock regulators who fined him, he hadn't discussed the loan amount or other details with them.

More recently, Musk told CNBC in May that Tesla was experiencing a “major rebound” in demand. A week later an auto trade group in Europe announced sales had plunged by half.

Musk has come under fire for allegedly exaggerating the ability of the system used for its cars to drive themselves, starting with the name. Full Self-Driving is a misnomer. The system still requires drivers to keep their eyes on the road because they may need to intervene and take control at any moment.

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