When Tesla announced last year that it would become a robotaxi service it was met with skepticism and with good reason, as the company has been promising fully autonomous driving for years now and has not delivered. This time around, the claims are even more outlandish as CEO Elon Musk has promised that the debut will happen in two months in Austin, although he has not answered any questions about how this is possible considering the issues the company has had with their beta testing of their autonomous driving AI.
The announcement came during Tesla’s first-quarter earnings call, when Musk promised investors that he would be selling paid rides to customers in fully autonomous Model Y vehicles in June, beginning with 10 to 20 cars in circulation on “day one”. After this, expansion would be swift, according to Musk “Once we can make it work in a few cities in America, we can make it work anywhere in America. [By the second half of 2026] the robotaxi business will move the financial needle a significant way.”
Tesla’s robotaxi service claims
Given the current world circumstances, Musk’s credibility and the fact that this has been promised before, analysts are not exactly expecting the June deadline to happen, never mind the expansion to other cities by the end of the year or by 2026. Piper Sandler senior research analyst Alexander Potter is one of the skeptics as after the earnings call she wrote “We feared that Tesla may gingerly walk away from its June commitments.”
But just as there are skeptics there are also believers, Tesla shares went up 5% in after-hours trading after the call since Musk also announced that he would shift back his focus to the company and step back from being a Trump advisor and running the controversial Department of Government Efficiency, which tanked the stock at the beginning of the year.
And we mean tanked, Tesla’s automotive revenue fell 20% year over year in the first three months of 2025 almost exclusively due to Musk’s involvement with the current administration and the tariff war they started against some of their main suppliers. Tesla’s net income in Q1 fell nearly 40% to $409 million, still less than what Wall Street had forecasted by nearly $200 million but still enough to worry not just investors but workers as well since the company already carried massive debt.
Given the financial state of the company, Musk refocused and decided to use the earnings call to get back on track “The future of the company is fundamentally based on large scale autonomous cars and large volume, vast numbers of autonomous humanoid robots […] the reality is that in the future most people are not going to buy cars.”
The problem for many continues to be the issues their self-driving AI has run into, mostly because Waymo, the self-driving car company owned by Alphabet has proven that it can be done and they already offer paid rides in cars with no human drivers in several U.S. cities. While their software can handle this, Tesla’s is stuck at Level 2” autonomy, which means the car needs a person in de driver’s seat who is supposed to be paying full attention to the road at all times.
The company is not giving up, with Tesla CFO, Vaibhav Taneja dismissing concerns over the software’s failings by stating that there are “a lot of edge cases that only happen very, very rarely” and that the company has been working relentlessly to ensure that the new Level 4 software that will need to be released to make this promise happen will be safe and have all kinks worked out before release.
Critics are not on board. Concerns have been raised due to a history of fatal incidents linked to the company’s autonomous driving features, which began with Autopilot and later expanded to Full Self Driving (FSD). Several lawsuits have emerged over time, accusing Tesla of overstating the capabilities of its self-driving systems and online platforms have begun tracking crashes involving the technology, highlighting ongoing public scrutiny.
But Musk is undeterred by this and has taunted “It’s only a couple months away so you can just see for yourself in two months in Austin.”