Tesla has officially taken a step into the autonomous driving sector by launching its first robotaxi service, marking a new chapter for the electric vehicle maker. The initial deployment, which began in Austin, Texas, involves a limited number of Tesla Model Y vehicles operating without drivers under close monitoring. Although it was a small and controlled rollout, it represents a starting point for Tesla CEO Elon Musk’s long-standing promise to bring self-driving technology to the masses. However, the road ahead is expected to be full of challenges, with many industry observers questioning whether the company can meet its ambitious goals within Musk’s predicted timeframe.
The Austin launch was conducted with layers of supervision. The selected Model Y vehicles ran in a defined geographical area. Each robotaxi had a safety operator seated in the front passenger seat and a remote backup in place for emergencies. The experiment also avoided adverse weather and only accepted hand-picked passengers, many of whom were known to be supportive of Tesla. This tight control suggests Tesla is aware of the technology’s current limitations. Despite these constraints, Musk claims that millions of Teslas will be capable of self-driving by the end of 2026.
Tesla’s approach to autonomous driving differs from most of its competitors. While companies like Waymo and Zoox rely on a combination of radar, lidar, and high-definition maps, Tesla uses only cameras and artificial intelligence to guide its vehicles. This camera-only system allows the company to keep production costs lower and makes remote software updates easier to deploy. Tesla vehicles already on the road can, in theory, become robotaxis with a software update, as Musk has repeatedly claimed. However, converting theoretical capability into practical reliability remains a major hurdle.
The scale of the challenge becomes clearer when comparing Tesla with Waymo, a company that began its self-driving efforts more than a decade ago. Since launching its self-driving project in 2009, Waymo has gradually expanded its robotaxi service to cities like Phoenix, San Francisco, Los Angeles, and Austin. Despite this head start and access to Google’s resources, Waymo’s fleet has grown only to about 1,500 vehicles. Waymo has also been cautious, focusing on safety and working within strict regulatory frameworks. This contrast highlights the difficulty Tesla faces in rapidly scaling up.
Some experts believe Tesla has advantages that could help it catch up or even surpass competitors. The company has a large manufacturing base, with the capacity to produce and deliver vehicles on a scale few rivals can match. It also has more than a decade of experience pushing over-the-air software updates to its customers. These strengths might enable it to move faster if the software reaches a point of safe reliability. However, industry analysts caution that dealing with unpredictable driving conditions and edge-case scenarios in traffic could take many years to master. Machine-learning systems, like the one Tesla depends on, require massive data and time to reach the necessary levels of precision and safety.
Public trust remains another major issue. Tesla’s Full Self-Driving system has been linked to several crashes, some fatal. The system, despite its name, still requires human supervision and has faced multiple investigations by federal safety regulators. The Austin robotaxi test was announced amid ongoing scrutiny of how Tesla markets its autonomous technology. Videos from the test show that the robotaxis are not without error. In one clip shared by a social media influencer, the vehicle drifted into the wrong lane at a traffic signal, remaining there for several seconds before correcting its position. Another report showed a robotaxi speeding in a school zone, near a school for the deaf. These incidents, while not causing harm, raise serious concerns about readiness for a wider rollout.
Tesla’s strategy to speed up deployment has also drawn criticism from within the industry. John Krafcik, the former CEO of Waymo, said Tesla’s cautious test in Austin reflects a lack of confidence in its current system. He pointed out that Tesla’s approach lacks the documented safety record and methodical validation used by Waymo. Critics argue that pushing robotaxis into public roads before resolving software issues might backfire by damaging public perception and slowing down the acceptance of autonomous vehicles overall.
Despite these concerns, the stock market responded positively to the news of Tesla’s robotaxi launch. Tesla shares jumped by over 8% following the announcement, reflecting investor enthusiasm about the potential revenue from autonomous services. Elon Musk has long stated that Teslas could be turned into ride-hailing robotaxis, generating income for car owners. But the vision of a shared fleet of self-driving vehicles roaming cities and replacing traditional transport models is still a work in progress.
Analysts at Piper Sandler believe Tesla remains ahead of the pack in the race toward autonomy. They argue that other US automakers are behind in software development and may struggle to compete if Tesla succeeds in scaling up. They also warn that the robotaxi rollout could disrupt the broader auto market. Shared autonomous vehicles could reduce the number of cars sold each year, as fleets are used more efficiently. This would shift revenue from vehicle sales to service-based income. According to their report, if Tesla succeeds, it could become the dominant force in the changing car industry.
Yet the path ahead is far from smooth. Tesla’s first-quarter earnings for 2025 showed disappointing results, with profits down 40% compared to the previous year. Vehicle deliveries were also weak, marking the worst performance since mid-2022. In Europe, Tesla has seen five straight months of declining sales. These financial pressures add more weight to the robotaxi project. A crash involving a Tesla robotaxi, especially if serious, could have a sharp negative effect on the company’s valuation and delay regulatory approval.
The global race toward autonomy is not limited to the United States. China, in particular, has several contenders such as Baidu, which launched its robotaxi fleet in 2022 and is reportedly planning to expand in Europe. Amazon-backed Zoox also began testing its autonomous vehicles on public roads in 2023. All these companies are pursuing different strategies, some more cautious, others more aggressive. But all share one common goal: to be among the first to offer a safe and scalable self-driving service to the public.
As Tesla pushes forward, questions remain about how far and how fast it can go. The robotaxi service in Austin, while a major milestone, was more of a carefully controlled demonstration than a commercial operation. The company must still convince regulators, the public, and even its own customers that its system is safe enough for full deployment. Navigating real-world traffic is a highly complex task, and it is not clear that Tesla’s camera-only system can handle every challenge.
