Al Root

Tesla stock was rising early Wednesday after CEO Elon Musk had a lot to say on Tuesday.

Investors will be parsing his words carefully.

Shares of the electric-vehicle maker were up 0.6% at $345.84 in premarket trading, while S&P 500 and Dow Jones Industrial Average futures were both 0.5% lower.

Early on Tuesday, via video at a conference in Qatar, Musk said that he expects to be CEO in five years. Commitment to his car company didn't come as a big surprise. Musk said he would spend less time in Washington, D.C., in April, but anything that indicates Musk is focused on his car company is generally good for the stock.

He also said that he expects to reduce his political spending. The reduction can have a significant impact on 2025 midterm races," says Carl Tobias, Williams Chair at the University of Richmond Law School. He hopes Musk's D.C. departure will reduce or end some of the "destructive activity" undertaken by DOGE. Investors hope less politics can help heal any brand damage from Musk's controversial role in the Trump administration.

Later in the day, Musk sat down with CNBC's David Faber in Austin, Texas. Musk confirmed that Tesla plans to start robotaxi service in the city by the end of June. He also indicated that there would be a small number of cars initially, humans would supervise operations, and the self-driving Teslas would only be able to go where the company was confident they could succeed. "We're going to be extremely paranoid about deployment, as we should."

That paints a picture of the robotaxi rollout that investors can follow.

"It's prudent for us to start with a small number," said Musk. That could be as low as 10. The goal is to be at a thousand in a few months and "hundreds of thousands" by the end of 2026. Any Tesla that has the correct hardware can become a robotaxi when the AI-trained self-driving software gets good enough. At that point, Tesla owners can elect to use their vehicles to make money in the robotaxi network when they aren't using their vehicles.

That's the goal, anyway. Musk also reiterated his expectation that Tesla could license its technology to other auto makers. Selling Teslas drive themselves in Austin successfully could be a catalyst for a deal.

Musk also addressed self-driving technology competition with BYD. He's confident Tesla has a superior product, citing local independent testing.

Musk can be expected to speak positively about his company and Tesla's AI technology, adding that "the only things that matter are autonomy and Optimus," Tesla's humanoid robot.

Still, it's what investors wanted to hear.

Write to Al Root at allen.root@dowjones.com

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May 21, 2025 04:43 ET (08:43 GMT)

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