Tesla Robotaxi Rollout Progresses Slower Than Anticipated

Tesla Chief Executive Officer Elon Musk has adopted a cautious tone regarding the rollout of the company's fledgling robotaxi business, an update described by several Wall Street analysts as uncharacteristically downbeat. The expansion of Tesla’s autonomous ride-hailing operation is proceeding more slowly than previously outlined by Musk.

Credit: TESLA

Musk told investors he hoped to have robotaxis and driverless vehicles in "a dozen or so states" by the end of the year. He stated that the company is taking a "cautious approach" to prevent any injuries or fatalities. He offered no new details about a robotaxi expansion to Dallas and Houston that Tesla announced on social media last weekend.

This cautious stance marks a change from last July, shortly after Tesla launched a small-scale pilot robotaxi network in Austin, Texas, when the CEO said robotaxis would be available to "half the population of the U.S. by the end of the year." He had also previously suggested growth would occur at a "hyper-exponential rate."

Analysts suggest Tesla is likely navigating the complex challenges of launching self-driving vehicles at scale, issues that competitors such as Alphabet’s Waymo have faced for years. Much of Tesla’s $1.5 trillion market value is tied to investors’ belief that it will soon operate a vast fleet of robotaxis and sell millions of autonomous-driving software subscriptions.

William Blair analysts described the earnings call as "low energy" and noted Musk’s "unfamiliar tone—reserved and cautious—about his usual favourite subjects." They concluded that the robotaxi rollout has been "far slower than expected."

Musk has a history of unfulfilled promises concerning self-driving vehicles. In January 2025, he acknowledged being known as "the boy who cried wolf" on driverless technology. However, he then added, "There's a damn wolf this time, and you can drive it."

It was clear from Wednesday’s call that the expected timelines around a large-scale robotaxi expansion are getting pushed back. During an April 2025 earnings call, Musk said robotaxis would become material to Tesla’s bottom line by “the middle of next year.” He now projects robotaxis will likely "not be super material this year," but "will be material probably in a significant way next year."

Tesla intends to build its robotaxi business around the Cybercab, a two-seater vehicle designed to operate fully autonomously, without a steering wheel or pedals. Musk said Wednesday that Tesla had begun Cybercab production, but reiterated that initial production "will be very slow."

He said "exponential" growth of Cybercab would happen "towards the end of the year and certainly next year." Musk added that it eventually would account for "most of our production long term."

Musk also got into the nitty-gritty challenges of rolling out driverless technology at scale. On last April’s call, he said he was confident there would be “millions of Teslas operating autonomously” in the second half of 2026. This time, he said it didn’t make sense to deploy the technology widely ahead of a forthcoming software update that will improve safety.

"The limiting factor for expansion is really rigorous validation, making sure things are completely safe," Musk stated. Some analysts took the delays in stride.

Morningstar analyst Seth Goldstein believes Tesla is exercising caution because "the stakes are very high." He added, "They don't want to risk an incident because they weren't extremely safe and weren't 100% confident."

Analysts at Morgan Stanley, who have been bullish about Tesla’s self-driving ambitions, wrote after Wednesday’s call that robotaxi is “progressing slower than investor expectations,” This limits the "near-term upside" to Tesla’s stock price.

Tesla shares were down more than 3% in afternoon trading Thursday. Barclays analysts pointed out that Tesla still possesses only a "nominal number of driverless vehicles," and "investors are awaiting a more significant increase."

Garrett Nelson, an analyst at CFRA Research, said he believes investors will continue to give Musk a pass if he misses some of the lofty robotaxi expansion targets, This is contingent on the company demonstrating scalability in a few markets. "People who have been following the story for years know that things happen on Elon time," Nelson commented.

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• Tesla’s robotaxi rollout is progressing more slowly than initially anticipated, according to Wall Street analysts.

• CEO Elon Musk adopted a cautious tone, prioritising rigorous safety validation to prevent incidents.

• Musk confirmed Cybercab production has started but expects initial output to be very slow.

Source: REUTERS