Tesla plans to launch robotaxi service in Austin, facing challenges in the driverless race

From Nasdaq.: 2025-06-02 10:21:00

Tesla, the world’s most valuable EV company, plans to launch its first robotaxi service in Austin, TX, on June 12. Using its Full Self-Driving software, customers can hail driverless rides through the Tesla app. Despite excitement, questions remain about the service’s operation and safety, with Tesla stock already rising 23% in anticipation.

Competing with Alphabet’s Waymo, Tesla faces challenges in the driverless race. Waymo currently dominates the U.S. robotaxi market, with services in four cities and significant investments. Tesla’s approach lacks transparency and regulatory approval, with questions from the NHTSA about safety. Despite potential cost advantages, Tesla’s service still faces uncertainty.

Tesla’s core EV business is struggling, with declining sales and increased competition from companies like BYD. BYD recently surpassed Tesla in EV deliveries and is rapidly expanding. Tesla’s sales strategy of deep discounts is impacting profit margins, and the company has revised its 2025 growth targets. Stock estimates for Tesla are also declining.

With a high price/sales ratio and reliance on unproven technology, Tesla appears overvalued. The market’s expectations for breakthroughs in autonomous driving and robotics may not materialize. Despite the upcoming robotaxi launch, Tesla’s risks include ongoing challenges in its core business and competition from established players like Waymo.

Zacks Investment Research highlights a semiconductor stock with significant growth potential in the AI, ML, and IoT sectors. With strong earnings growth and expanding market demand, the stock offers opportunities in the booming semiconductor industry. Global semiconductor manufacturing is projected to reach $803 billion by 2028, creating potential for substantial growth.



Read more at Nasdaq.: Tesla Robotaxi Nearing Launch: Buy, Hold or Sell the Stock Now?