Tesla’s long-anticipated entry into the robotaxi sector — set to debut later this month — is arriving in Austin, Texas, which has become a crucial battleground for autonomous driving technology.

CEO Elon Musk mentioned in a post on X last week that the company has been conducting tests with Model Y vehicles that have no safety drivers present in the Texas capital for several days.

Tesla’s robotaxi service in Austin will commence with 10 vehicles and is expected to grow to thousands, expanding into additional cities if the initial launch is successful, Musk stated in a May 20 interview with CNBC’s David Faber.

However, despite the market being in its early stages, Tesla is already contending with significant competition.

The electric vehicle manufacturer is among several firms utilizing Austin as a testing site and initial market for autonomous driving technology. They are all capitalizing on Austin’s pool of robotics and AI talent, tech-savvy population, relatively affordable housing compared to other tech hubs, and a city layout featuring horizontal traffic lights and wide roads that facilitate mapping software.

Yet, the primary reason they favor Texas may be the state’s favorable regulations for robotaxis.

Volkswagen Group of America initiated its first autonomous vehicle testing program in Austin in July 2023.

Currently operating in Austin are Alphabet’s Waymo, Amazon’s Zoox, Volkswagen subsidiary ADMT, and the startup Avride.

Waymo began providing robotaxi rides in Austin in collaboration with Uber in March. Zoox commenced testing in the area last year, while ADMT has been evaluating Volkswagen’s electric ID vehicles in the city since 2023. Avride, which is based in Austin, is testing its autonomous vehicles and delivery robots in the Texas capital, with intentions to launch a robotaxi service in the city eventually.

“The leaders in this field are becoming apparent, and it’s merely a question of scaling,” remarked Toby Snuggs, head of sales and partnerships at Avride.