Electric vehicle maker Tesla (TSLA) is planning to launch a ride-hailing service, and said service is already up, running, and doing well, if only for a small cohort of users in a comparatively limited area. That news, along with strong financial results, helped to propel Tesla stock up nearly 21% in Thursday trading.
Broad use of the Robotaxi system might be a couple years out, but a report from Inside EVs noted that the Robotaxi service can still run with the numbers it currently has. Basically, Tesla employees in San Francisco are able to get access to a company-sponsored Robotaxi system. The service is a bit limited as only Tesla employees can use it and the service will only take them around the Bay Area.
But sometime next year, Tesla says the service will expand. There are some issues regarding regulation to consider; Tesla has permits in California for “testing with a safety driver behind the wheel.” In Texas, meanwhile, no such permits are required. Some other states are expected to open up for testing next year.
Paid Rides Next Year, Says Musk
Tesla CEO Elon Musk called for “driverless Teslas doing paid rides next year.” Musk issued the call during the company’searnings call and that caught plenty of media attention. Previously, investors were concerned about a poorly functioning Robotaxi system.
Musk’s confident call for paid rides next year appeared to win over quite a few investors as evidenced by the hefty run-up in Tesla’s share price. Though there are signs that Tesla may have some difficulty getting traction in California due to the regulatory issues, there will likely be other markets with more interest.
Is Tesla a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 11 Buys, 16 Holds and eight Sells assigned in the past three months, as indicated by the graphic below. After a 20.81% rally in its share price over the past year, the average TSLA price target of $207.83 per share implies 19.14% downside risk.
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