Tesla Stock Rises. Musk's Robotaxi Bet Gets a New Vehicle

Tesla ( TSLA ) shares gained about 2% as investors assessed the company's push beyond electric vehicles and into autonomous transportation, according to a Sept. 3 company update. The latest step came with the introduction of the Cybercab in Austin. Tesla designed the vehicle specifically for autonomous ride-hailing, with seating for two and without conventional driver controls such as pedals or a steering wheel. The new model could give Tesla a different cost structure for its robotaxi operations. A purpose-built vehicle may require fewer components than a standard passenger car, potentially helping the company manage expenses as it expands the service. Tesla began operating robotaxis in Austin in June last year and has since added other U.S. locations. The service currently uses Model Y vehicles equipped with its Full Self-Driving system. Investors are also watching whether Tesla can turn the robotaxi operation into a larger source of revenue and profit. Achieving that would depend on fleet growth, software performance and vehicle utilization, while competition and regulatory hurdles remain important risks. The company is also developing humanoid robots as another potential growth business.