Just when Tesla’s (TSLA) robotaxi dreams started gaining steam—bam, another curveball.
Tesla bulls have been itching for robotaxis to hit the road, and Elon Musk’s Austin trial announcement stirred the pot last month.
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Though the dream’s still alive, the detours have been piling up of late, spelling more speed bumps ahead for investors.
The timing couldn’t be worse.
The bulls felt they could breathe easy, with Musk finally all-in on Tesla. However, the off-putting developments of late spell more turbulence ahead for the robotaxi rollout.
High stakes, slow progress for Tesla’s robotaxi
Since Tesla revealed the sci-fi-esque Cybercab last October, investors and Wall Street pundits have hailed it as the next revolution.
To be fair, the robotaxi hype’s been circling for years.
Related: Tesla robotaxi launch hits major speed bump
Musk promised a million cars on the road by 2020, but that deadline famously came and went like a ghost.
Following the October reveal, Tesla fans felt shortchanged when Musk jumped on President Trump’s bandwagon.
The focus quickly shifted away from the self-driving cars to “DOGE” government drama.
However, after Q1 and soap-opera-like fallout with Trump, Musk’s focus is back on Tesla.
He told investors during Tesla’s Q1 earnings call that “Doge work is mostly done,” pledging just “a day or two a week” on outside commitments.
Needless to say, a lot is riding on the robotaxi catalyst, the moonshot analysts say, which could supercharge Tesla’s future.
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Wedbush’s Dan Ives sees a trillion-dollar upside if Tesla nails self-driving. At the same time, relatively conservative Oppenheimer analysts say it could be a make-or-break for the stock.
Lawmakers lookstall Tesla’s Austin rollout
Tesla circled June 22 for its big robotaxi debut in Austin.
Musk picked Texas for a reason: home turf with a lot looser autonomous vehicle (AV) rules than California.
Related: Google plans major AI shift after Meta’s surprising $14 billion move
However, just days before go-time, Texas lawmakers have sent a disappointing message.
A group out of Austin urged Tesla to hold off until September 1, when new AV rules kick in. The new rules include safety checks and clearer compliance rules.
Seven Texas lawmakers have reportedly signed the hold-off on the rollout.
The list includes big names like Rep. Vikki Goodwin (D-Austin), Sen. Sarah Eckhardt, Sen. Judith Zaffirini, Rep. Lulu Flores, and three others—seven in total.
Despite the roadblocks, Tesla is still on course for the trials. Tesla’s official stance remains that it has already met safety standards under the current law and will continue pushing on.
The message is essentially for Tesla to pump the brakes, follow the new rules, and launch later when everything complies.
The pressure is unwelcome from the company’s perspective, especially when it has received an AV operator designation in Austin ahead of the planned trials.
All this hits as Tesla’s FSD tech is under scrutiny, throwing safety concerns back in the spotlight.
To put things in perspective, a Cybertruck drifted into oncoming traffic on FSD in mid-June. Days later, a Model 3 got stuck on train tracks and got hit.
Meanwhile, Tesla’s competition in the niche continues to impress.
Alphabet’s Waymo and GM’s Cruise have successfully operated driverless ride-hailing services in cities like Phoenix and San Francisco over the past few years.
In contrast to Tesla, they’ve taken a more gradual approach, with geofenced areas, extensive safety driver testing, and slower expansion.
Tesla is taking a more aggressive route by utilizing its existing owner fleet and vision-only tech, which many believe is riskier.
Nevertheless, Tesla needs to act fast to pull its stock out of the rut it’s been in over the past year.
It’s down north of 20% YTD, and 27% in the past six months alone.
The stock is hovering near the low $320s, suggesting that some of the robotaxi excitement and Musk’s refocusing efforts are baked into its price.
Analysts’ average targets sit around the low $300s, so the market isn’t looking to price in the potential wild success.
In short, Tesla’s stock looks more like a bet on its ability to transition from simply selling EVs to monetizing autonomous technology at scale.
Related: EVs suffer surprising rejection in a crucial market
