About the company

In recent years, Tesla has overcome a number of challenges – from manufacturing problems, quality problems and software bugs, to regulatory disputes to criticism related to the safety of its autonomous systems. Nevertheless, it maintains a strong position in the market, which it justifies to investors mainly by its ability to innovate and the potential for future growth in the field of autonomous transport or energy services. Tesla wants to fundamentally change the mode of transport by replacing human drivers with fully autonomous vehicles without a steering wheel and pedals, while offering a massively expandable robotaxi service as a cheap, accessible and safe alternative to traditional transport. Instead of just being an electric car manufacturer, it is aiming to become a leader in artificial intelligence (AI) and robotics, with autonomy at the core of its future business.

Launch of robotaxi in Texas

On June 22, 2025, Tesla began operating a limited paid robotaxi service with a fleet of Model Y SUVs in Austin. The vehicles drive in a restricted area and carry paying customers at a flat fee of $4.20. A Tesla employee sits in the passenger seat for safety, but there is no longer a driver behind the wheel. The launch is deliberately limited to a small group of invited passengers and about a dozen vehicles, which also avoid bad weather and difficult intersections, which means that the company is still cautious about launching the service into public operation, but it is also required by regulations that Tesla's robotaxi has not yet passed.[1][2]

Strategic importance

The robotaxi service is not so much a technological milestone (it is already operated by other companies) but is mainly a strategic shift for Tesla itself. As sales growth of its electric cars slows globally and faces strong competition, especially from Chinese manufacturers such as BYD, Elon Musk has focused the company's attention on autonomous vehicles and robotics. Such a strategy is key to defending its high market valuation. Investors are betting that robotaxi could represent a significant source of income for the company. The advantages of such a model lie in the elimination of drivers and the use of a Full Self-Driving (FSD) system, which can disrupt the passenger transport market and compete with companies such as Uber with significantly lower costs per kilometre. ARK Invest predicts that by 2029, up to 90% of Tesla's value could come from autonomous transportation.[3][4]

Regulatory challenges

As already indicated, regulations are still a big obstacle to Tesla's ambitions. The U.S. Highway Traffic Safety Administration (NHTSA) has long expressed concerns about FSD software. This system has been linked to accidents that the office said could have been avoided. Texas lawmakers have already called on Tesla to delay the launch of the service until new state regulations are in place that may require licenses for operators. That's why Tesla decided to launch the service in limited conditions.[5][6]

So, at what stage is Tesla's robotaxi compared to Waymo?

Tesla is under scrutiny for its security profile, while Google's Waymo has yet to record any deaths related to its service. Waymo already operates more than 1500 vehicles in several cities, has very good statistical records in terms of safety and millions of kilometres travelled. Tesla relies mainly on cameras and its FSD software, while striving for mass scalability thanks to the huge amount of data from real driving of its vehicles. However, as mentioned earlier, its robotaxi service only works with a very limited number of vehicles and safety surveillance so far. Waymo offers completely driverless rides in some regions and benefits from proven partnerships and user trust.[7]

Market reaction

Immediately after the launch of the robotaxi test drives in Austin, the market reacted positively, as Tesla shares rose by more than 10% on Monday, June 23, 2025, signalling renewed investor confidence in the company's autonomous ambitions.* The growth came despite the EV segment facing pressure, which has seen the stock in the red since the beginning of the year. Deliveries for the first quarter reached the lowest level in the last two years. Investors' eyes will soon be closely focused on the results for the second quarter.

Tesla's share price development over the past 5 years. (Source: Google Finance)*

Financial results

Tesla's financial health therefore increasingly depends on autonomous driving, which is expected to be a key driver of future sales growth and profitability. Although the automotive division remains the main source of revenue, it saw a 20% decline in sales and a sharp drop in margins in the first quarter of 2025, which contributed to an overall decline in the company's sales of 9% to $19.34 billion, and a drop in net profit of 71% to $409 million. The energy division, on the other hand, grew and achieved revenues of $1.64 billion, up 67% from a year ago.[8]

Conclusion

It seems that the future of Tesla is indeed more in autonomous transportation. The slowdown in growth and declining profitability show that the current model is no longer enough. The launch of robotaxi is not just a new product, but an effort to reframe the company's story from a car manufacturer to a technology platform with a global reach. Musk needs to offer investors a new narrative before confidence is finally reversed. If autonomous services demonstrate scalability and profitability, Tesla will gain a new line of growth. If not, it will lose not only its lead, but also its status as a growth icon.

* Past performance is not a guarantee of future results

[1] https://www.webpronews.com/teslas-robotaxi-elon-musks-vision-for-a-driverless-future-revealed/

[2] https://www.reuters.com/business/autos-transportation/why-teslas-robotaxi-launch-was-easy-part-2025-06-24/

[3] https://www.monexa.ai/blog/tesla-s-robotaxi-ambition-financials-and-market-im-TSLA-2025-06-20

[4] https://www.thenationalnews.com/business/markets/2025/01/29/tesla-banks-on-ai-and-full-self-driving-tech-amid-declining-profits-and-weakening-motor-business/

[5] https://www.nbcnews.com/tech/innovation/expect-elon-musk-launches-tesla-robotaxi-service-rcna213546

[6] https://247wallst.com/investing/2025/06/23/teslas-robotaxi-revolution-is-it-about-to-become-the-new-uber/

[7] https://www.investing.com/news/stock-market-news/factboxhow-teslas-robotaxi-efforts-stack-up-against-waymo-and-zoox-4104780

[8] https://www.cnbc.com/2025/04/22/tesla-tsla-earnings-report-q1-2025.html