Two Months Into Tesla's Robotaxi Launch: Where Does It Stand Now?

Two months after Tesla TSLA rolled out its first commercial robotaxi service in Austin, the big question is—how’s it really going?

Tesla CEO Elon Musk bets the company’s future on autonomous vehicles, pitching robotaxis as the next growth engine. The launch in Austin on June 22 marked a milestone, with paying customers riding in Model Y vehicles monitored by safety drivers and remote operators. In the initial days of the rollout, videos quickly surfaced showing Tesla vehicles braking abruptly, creeping into intersections, or violating traffic rules. Passengers described some rides as confusing.

Having said that, management reassured on the second-quarter earnings call that robotaxis in Austin logged over 7,000 miles without major safety incidents.

Tesla has also begun testing in the San Francisco Bay Area—though regulators there prevent it from using the “robotaxi” name. Notably, in Austin, the safety monitor sits in the passenger seat but in the Bay Area, regulations still require one in the driver’s seat. Critics, including former Waymo CEO John Krafcik, argue that as long as Tesla vehicles rely on in-car safety monitors, they’re not truly robotaxis at all.

Tesla, however, points to data suggesting that its Full Self-Driving (FSD) system is statistically safer—10 times so, according to management—than human drivers. The shift to the FSD Version 12 has already boosted subscription adoption by 45%. Musk is promising even more with Version 14, which he teased yesterday.

New vehicles can now drive themselves off the assembly line, with direct-to-customer autonomous deliveries planned by year-end in select regions. Also, Tesla aims to extend the robotaxi service to reach half of the U.S. population by the end of 2025, pending regulatory approvals. It plans to expand to other U.S. cities like Nevada, Arizona and Florida after obtaining necessary permits and approvals. Meanwhile, service coverage in Austin is set to grow more than tenfold.

Still, the road ahead isn’t without hazards. Lawsuits accusing Tesla of overstating FSD’s safety, regulatory hurdles in key markets, and technical hiccups highlight the long journey before Musk’s bold vision of a nationwide robotaxi fleet becomes a reality. Plus, Tesla is lagging behind early movers in the robotaxi space like Alphabet’s GOOGL Waymo and Baidu BIDU.

TSLA’s Competitors in the Robotaxi Space

Alphabet’s Waymo is Tesla’s toughest rival in the robotaxi race. Waymo already runs fully driverless Level 4 services in Phoenix, San Francisco, Los Angeles, Austin and Atlanta, delivering around 250,000 paid rides every week. Backed by Alphabet’s $5 billion multi-year investment and partnerships with Hyundai, Uber and Zeekr, Waymo has both scale and strategic muscle. With expansion underway to cities such as Miami and Washington D.C, Waymo is setting the standard that Tesla must catch up to.

Baidu is a major force in the robotaxi industry, though its efforts are concentrated mainly in China. Its autonomous driving program, Apollo Go, is already running fully driverless robotaxi services across 16 cities globally and has completed more than 14 million rides as of August 2025. Baidu is also fast-tracking Apollo Go’s global expansion through high-profile partnerships with Uber and Lyft.

Investor Takeaway

After two months, Tesla’s robotaxi push is still in the early innings. The company shows tangible progress and expansion potential but remains behind leaders like Waymo and Baidu. With regulatory battles and skepticism ahead, investing in this vision is less about today’s revenues and more about Tesla’s ability to eventually deliver on Musk’s bold promise.

The Zacks Rundown on TSLA Stock

Shares of Tesla have lost around 20% year to date compared with the industry’s decline of 16%.

From a valuation standpoint, TSLA trades at a forward price-to-sales ratio of 10.12, above the industry and its own 5-year average. It carries a Value Score of D.

The Zacks Consensus Estimate for TSLA’s earnings has been southbound over the past 60 days.

Tesla stock currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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