Tesla (NASDAQ:) shares surged 3.87% to $342.45 in Monday’s trading session, buoyed by significant developments in both its robotaxi operations and energy business expansion. The electric vehicle giant secured a crucial permit to operate ride-hailing services in Texas while simultaneously making strategic moves into the UK energy market. These developments come as Tesla seeks to diversify its revenue streams beyond traditional car sales, which have faced headwinds globally.
Tesla Robotaxi Breakthrough: Texas Permit Opens New Revenue Stream
Tesla achieved a major milestone this week by obtaining a permit to operate as a “transportation network company” in Texas through its Tesla Robotaxi LLC subsidiary. The permit, issued by the Texas Department of Licensing and Regulation, is valid until August 6, 2026, and allows Tesla to compete directly with established ride-hailing companies like Uber (NYSE:) and Lyft (NASDAQ:) across the entire state. This marks Tesla’s first official authorization to run a ride-hailing business anywhere in the United States.
The company has been operating a limited robotaxi service in Austin since late June, primarily serving invited riders including social media influencers and analysts. The Austin fleet consists of Model Y vehicles equipped with Tesla’s latest partially automated driving systems, currently operating with human safety supervisors on board. However, the new permit crucially allows Tesla to operate without requiring a human safety driver, representing a significant step toward fully autonomous operations.
CEO Elon Musk’s ambitious timeline suggests Tesla could serve half of the U.S. population with autonomous ride-hailing services by the end of 2025.
While this timeline reflects Musk’s self-described “pathological optimism,” the Texas permit provides the regulatory foundation necessary to scale operations. The move comes despite some safety concerns, including reported incidents of Tesla robotaxis disobeying traffic rules, which have drawn federal scrutiny from the National Highway Traffic Safety Administration.
Texas has historically maintained more permissive regulations for autonomous vehicle testing compared to other states, making it an ideal proving ground for Tesla’s robotaxi ambitions. The success of this program could serve as a template for expansion into other markets, potentially creating a substantial new revenue stream for the company as it faces challenges in its core automotive business.
Tesla’s UK Energy Expansion and Stock Performance
Tesla’s application for an electricity supply license in the UK through Tesla Energy Ventures Limited represents another significant diversification effort beyond its core automotive business.
The Manchester-based subsidiary, led by Andrew Payne as head of energy for the EMEA region, filed the application with UK energy regulator Ofgem at the end of last month. If approved, Tesla would compete directly with established energy suppliers across England, Wales, and Scotland, leveraging its expertise in battery storage and solar energy systems.
This energy expansion comes at a critical time for Tesla, as its traditional automotive revenue faces mounting pressure. The company’s auto revenue fell 16% from April to June, with overall revenue declining 12% according to recent earnings reports.
Tesla’s best-selling Model Y and Model 3 experienced a 12% sales decline compared to the previous year, while premium models including the Cybertruck saw sales plummet 52%. The company’s energy division, however, showed strong growth with revenue from solar cells, batteries, and other energy products nearly doubling to $1.5 billion.
Current trading data shows Tesla at $342.45, up $12.78 or 3.87% in Monday’s session, with a market capitalization of $1.105 trillion. The stock has demonstrated significant volatility this year, down 15.17% year-to-date compared to the S&P 500’s 8.61% gain, though it maintains strong one-year returns of 71.28%. Key financial metrics reveal a trailing P/E ratio of 196.22 and a profit margin of 6.34%, indicating the market’s high expectations for future growth despite current challenges.
The combination of regulatory approval for robotaxis and expansion into energy markets appears to be driving renewed investor confidence in Tesla’s diversification strategy. These initiatives could provide crucial revenue streams as the company navigates increased competition in the electric vehicle market, particularly from Chinese manufacturers, and addresses concerns about the impact of Elon Musk’s political activities on brand perception and sales performance globally.
***
Looking to start your trading day ahead of the curve?
Get up to speed before the bell with Bull Whisper—a sharp, daily premarket newsletter packed with key news, market-moving updates, and actionable insights for traders.
Start your day with an edge. Subscribe to Bull Whisper using this link.