Tesla Launches Robotaxi in Austin: Are Industry Dynamics Favorable?

Tesla TSLA launched a small group of self-driving taxi service in Austin, TX, marking the first time its autonomous vehicles transported paying passengers without a human driver behind the wheel. CEO Elon Musk confirmed the robotaxi launch, while social media influencers shared videos of their inaugural rides. The pilot is considered a key step toward Musk's broader vision of autonomous mobility as a major revenue driver for the company.

A small fleet of around 10 Tesla vehicles was seen operating in the South Congress area without a driver, but a passenger in the front seat acting as a safety monitor. However, the extent of their control over the vehicles remains unclear. Tesla had invited a select group of influencers to participate in the trial, which was tightly controlled and restricted to a specific area. Per Musk’s post on X, rides were priced at a flat rate of $4.20.

As the launch approached, Texas lawmakers passed new legislation regulating autonomous vehicles. Governor Greg Abbott signed a bill requiring companies to obtain state permits to operate driverless cars. The law, set to take effect on Sept. 1, 2025, indicates that state leaders from both political parties are urging the driverless-vehicle industry to proceed with caution.

Tesla’s high-profile launch comes as other players in the space are also racing to expand robotaxi services. However, with rising regulatory scrutiny and safety concerns — highlighted by Texas’ new permit law — industry momentum remains uncertain. TSLA carries a Zacks Rank #3 (Hold) at present. 

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

Challengers in the Commercial Robotaxi Arena

Zoox, Amazon’s AMZN autonomous vehicle subsidiary, has opened its first dedicated robotaxi manufacturing facility in California, marking a key step toward launching its commercial self-driving taxi service in the United States. Amazon Zoox is actively testing a fleet of more than 20 driverless vehicles in various American cities. In San Francisco, operations are currently focused on the South of Market district. Amazon Zoox plans to soon offer test rides to the public.

Alphabet’s GOOGL self-driving division, Waymo, announced that it will restart autonomous vehicle testing in New York City next month as part of a broader strategy to expand its operations nationwide. The Alphabet subsidiary views New York’s dense and dynamic urban landscape as an essential proving ground for its technology. Waymo remains the only U.S. firm offering a commercial robotaxi service to paying passengers. With a fleet exceeding 1,500 vehicles, Alphabet Waymo facilitates more than 250,000 rides each week in major cities, such as San Francisco, Los Angeles, Phoenix and Austin.

Tesla’s Price Performance, Valuation and Estimates

Tesla has underperformed the Zacks Automotive – Domestic industry and the Auto, Tires and Truck sector year to date. Shares of Tesla have lost 20.2% compared with the industry’s decline of 19.6%.

YTD Price Performance

From a valuation perspective, Tesla appears overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 9.88, higher than its industry’s 2.60.

EPS Estimates Revision

The Zacks Consensus Estimate for 2025 EPS has moved down by a penny in the past 30 days. The Zacks Consensus Estimate for 2026 EPS has moved up by a penny in the past seven days.

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

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