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(Reuters) -Tesla is set to begin a test of its long-promised robotaxi service on schedule in Austin, Texas, by the end of June, Chief Executive Elon Musk said on Tuesday, even as the company faces safety questions from a U.S. regulator.
The electric vehicle maker will roll out about 10 self-driving cars in some parts of the city, and scale up to about a thousand within a few months, Musk told CNBC in an interview.
"We are actually going to deploy not to the entire Austin region, but only the parts that are the safest."
Tesla sales have fallen worldwide with rising competition and as Musk faces a backlash for his right-wing political views and his work for U.S. President Donald Trump.
Musk has said he will reduce his work for Trump and focus on Tesla. "My rough plan on the White House is to be there for a couple days, every few weeks, and to be helpful where I can be helpful," he said.
A successful robotaxi trial is crucial for Tesla as Musk has shifted the company's focus away from building a new, cheaper EV platform to launching the robotaxi service and its Optimus humanoid robots. Much of Tesla's valuation hangs on that bet.
"The only things that matter in the long term are autonomy and Optimus," Musk told CNBC.
Autonomous vehicle technology has been hard to commercialize, with tight regulations and heavy investments forcing many companies to give up. Those still in the race, including Alphabet's Waymo, have faced increased scrutiny.
The National Highway Traffic Safety Administration has been investigating collisions involving Tesla's full self-driving (FSD) advanced driver assistance software in reduced roadway visibility conditions since October. The U.S. road safety regulator asked Tesla last week to answer questions on its paid robotaxi service launch to assess how the cars will perform in poor weather.
Tesla is in talks with major automakers to license the FSD software that is expected to underpin its robotaxis, Musk said.
To power his broader artificial intelligence vision, Musk's xAI startup has been ramping up its data center capacity to train more advanced models, and its supercomputer cluster in Memphis, Tennessee, called "Colossus," is touted as the world's largest.
xAI will deploy a million of Nvidia's advanced Blackwell chips at a new facility near Memphis, Musk said. "So long as Nvidia is better than what we make, we'll keep buying from Nvidia," he said. xAI bought a 1-million-square-foot property in Southwest Memphis, Tennessee, the Greater Memphis Chamber said in March.