Last Sunday, Tesla $Tesla Motors(TSLA)$ launched its first Robotaxi pilot project in Austin, Texas. Although the initial rollout was modest—featuring just about 10 Model Y vehicles equipped with FSD (Full Self-Driving) software instead of the previously announced Cybercab—the cars operated within a designated area, accompanied by safety drivers. The first group of riders, carefully selected by Tesla, only had to pay a fixed shareholder fare of $4.20.
Despite the low-key nature of the launch, this milestone marks Tesla's long-awaited delivery on a promise years in the making. It is widely regarded as a critical inflection point, signaling the company’s entry into its next strategic phase.
Source: X
Tesla Finally Delivers on Its Robotaxi Pledge
As early as 2016, Elon Musk introduced the idea of autonomous ride-hailing when launching FSD HW 2.0, stating that “Tesla owners could let their cars join a shared fleet to earn money when not in use.” In 2019, he doubled down on this vision at Tesla’s Autonomy Day, pledging to deploy 1 million Robotaxis by 2020, projecting $30,000 in annual earnings per vehicle.
However, in the years that followed, Tesla shifted focus to scaling production and engaging in price competition amid the EV boom and subsequent market saturation. The Robotaxi initiative was repeatedly postponed.
That changed last year when Tesla released a more concrete development timeline: pilot operations in 2025, and the unveiling of the Cybercab—a fully autonomous, two-seat vehicle without a steering wheel—in October 2023. It is expected to hit the market by 2026. This roadmap significantly boosted investor sentiment and was widely credited for the sharp rally in Tesla’s stock price. Some even speculate that Musk’s increasing alignment with Donald Trump is partly aimed at securing policy support for the Robotaxi rollout.
After nearly a decade of delays, Tesla has now officially launched its Robotaxi pilot. Though on a small scale, it represents a step-change for the company. Musk explained the cautious approach: “We could launch with 1,000 or even 10,000 vehicles on Day 1, but that wouldn’t be prudent. Instead, we’ll start with 10 per week and slowly ramp to 20, 30, 40.”
The Business Logic Behind Tesla’s Robotaxi Strategy
From Tesla’s standpoint, the Robotaxi initiative is a natural extension of its hardware (EVs) and ever-improving software (FSD) platforms. Once full autonomy is achieved, Tesla owners can simply enroll their cars into the Robotaxi network to earn income—unlocking value from assets that already exist. In the ideal case, this business model could approach zero marginal cost.
That said, relying on owner vehicles may limit scalability. Tesla’s introduction of the purpose-built Cybercab reflects its ambition to take a substantial slice of the traditional ride-hailing market. Conventional ride-share platforms struggle with high labor costs and low margins. According to ARK Invest, Robotaxis could achieve 70–90% gross margins, far surpassing those of Uber and Lyft. Autonomous driving appears to be an inevitable future.
McKinsey forecasts that autonomous mobility could account for 20–30% of the global ride-share market by 2030 and more than 50% by 2040. Morgan Stanley $Morgan Stanley(MS)$ estimates the Robotaxi sector could reach a $2 trillion valuation by 2030.
Meanwhile, Tesla’s share in the global EV market has been squeezed by the rapid rise of Chinese EV brands. With electrification entering a more mature phase, Tesla is banking on Robotaxi to serve as its “second growth curve.”
Robotaxi: Opportunities and Competitive Threats
While the Robotaxi space promises massive market potential and juicy margins, it is also poised for cutthroat competition. Automakers, ride-hailing platforms (e.g., Uber $Uber(UBER)$ ), software developers (e.g., Alphabet $Alphabet(GOOG)$ ’s Waymo), and hardware suppliers (e.g., NVIDIA $NVIDIA(NVDA)$ DRIVE) are all aggressively pursuing the same goal, forming strategic alliances to build end-to-end ecosystems.
In contrast, Tesla has adopted a highly self-reliant and closed-loop approach, developing nearly all hardware and software in-house. As a result, it now appears to be taking on the world solo—surrounded by a growing consortium of competitors.
Waymo, Google’s autonomous driving subsidiary, stands out as a clear front-runner. With computing power supplied by NVIDIA DRIVE, partnerships with Uber, and OEM support from Geely, Toyota, and Mercedes-Benz, Waymo has deployed over 1,500 Robotaxis across multiple U.S. cities. As of now, it handles more than 250,000 rides per week and has logged over 100 million autonomous kilometers—without a single serious accident. Its crash rate is 96% lower than that of human drivers.
Source: Waymo
Notably, Waymo and Tesla follow very different technical paths: Waymo relies on LiDAR and high-definition mapping, while Tesla uses a pure camera-based approach powered by neural networks.
Source: BloomberNEF
Tesla clearly lacks a first-mover advantage here. However, its strong brand appeal and distinctive FSD strategy may still help it leapfrog competitors post-launch. Still, this space could present Tesla with EV-level competition intensity—or worse.
Tesla’s Other Growth Bets
With its EV dominance weakening and electrification penetration reaching a plateau, Tesla’s search for new growth engines is becoming urgent. In addition to Robotaxi, the company’s most ambitious long-term bet is Optimus, its general-purpose humanoid robot.
First unveiled in 2021, Optimus has been a work in progress for several years. Last year, Tesla announced plans to deploy thousands of Optimus units internally by 2025. Market watchers expect small-scale commercial production for enterprise customers by 2027, followed by a home-use version around 2028, and full-scale production sometime after 2030.
However, profitability and competition remain major challenges. One key concern is whether Tesla can profitably mass-produce Optimus at its targeted $10,000 price point. A higher price could curb demand. Meanwhile, rivals such as Unitree Robotics in China have made notable strides, producing humanoid robots capable of running, dancing, and performing intricate hand movements—suggesting that Tesla may not enjoy long-term dominance.
Ethical questions around job displacement, and potential production bottlenecks due to rare-earth shortages, have also emerged as concerns.
How Should Investors View Tesla’s Stock Price?
Tesla’s stock price today reflects far more than its EV business. Since Tesla laid out clear roadmaps for both Robotaxi and Optimus in 2023, the stock has surged. Although recent political controversies involving Musk have dampened the rally, market valuations already price in substantial future growth from these futuristic bets.
Source: Gurufocus
Clearly, short-term EV fundamentals are no longer the focus for investors. The market is now trading on Musk’s vision. We believe Tesla’s current valuation reflects expectations of 20%+ earnings growth annually over the next decade.
In an optimistic scenario, if Tesla can deliver on its bold promises, it may emerge as the defining tech company of the next era. But these aspirations rest on a fragile foundation of uncertainties.
In the medium term, the success of the Robotaxi rollout and the timely delivery of Optimus will be crucial tests. Despite the significant pullback from its all-time highs, Tesla’s current stock price remains volatile and highly contingent on narrative.
Invesight Viewpoint
Whether it’s Robotaxi or Optimus, both represent Tesla’s attempt to shed the label of “car company” and evolve into a platform-driven AI and robotics powerhouse. But the road from vision to execution is riddled with risk. The pioneers of ideas and technology aren’t always the ultimate winners. For now, Tesla’s future remains a high-stakes bet on whether imagination can become reality.
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