Deutsche Bank sees Tesla launching Robotaxi services next year

Investing.com -- Deutsche Bank analysts now expect Tesla (NASDAQ:TSLA ) to roll out its highly anticipated robotaxi services as early as 2025, with small-scale operations in Texas likely to launch next year.

The bank explained in a note Monday that the development follows Tesla's recent commentary on its autonomous driving efforts.

Deutsche Bank's note emphasizes that Tesla's deployment of robotaxis without safety drivers is becoming the "base case" for 2024, using existing models like the Model 3 and Model Y for paid rides via the Tesla app.

Deutsche Bank highlights that Texas will likely be the first market for Tesla's robotaxi services due to regulatory flexibility.

In contrast, launching in California may require additional steps, such as including safety drivers. The analysts add that "Arizona and Florida would also be natural markets to enter afterwards."

According to Deutsche Bank, the success of Tesla's robotaxi initiative hinges on improvements in the company's Full Self-Driving (FSD) software.

They explain that the upcoming FSD version 13 is expected to deliver "5-6x improvement" over the current v12.5, and "1,000x improvement" relative to earlier iterations from January.

The analysts believe FSD could surpass human performance by mid-2025, marking a key milestone in Tesla's path to achieving ultra-low-cost transportation.

Tesla's strategy appears focused on owning the entire value chain of robotaxi services rather than partnering with ride-hailing companies.

"Management indicated it currently does not plan to partner with ride-hailing companies, aiming to capture the entire value chain for a robotaxi network," the note states.

Looking ahead, Deutsche Bank remains confident in Tesla's ability to meet regulatory expectations and sees the launch of the first "Cybercab" in 2026, depending on production progress.

With Tesla advancing quickly, analysts expect growing investor enthusiasm, stating that "robotaxi expectations/sentiment have taken a step-up" following Tesla's latest earnings.

Source: Investing.com