Tesla TSLA has long been convincing investors that robotaxis could become the company’s biggest long-term growth driver. CEO Elon Musk has repeatedly positioned autonomous driving as a future multi-trillion-dollar opportunity for the company. That narrative has also helped support investor optimism even as Tesla’s core EV business faces slowing demand, rising competition and margin pressure.…
Tesla TSLA has long been convincing investors that robotaxis could become the company’s biggest long-term growth driver. CEO Elon Musk has repeatedly positioned autonomous driving as a future multi-trillion-dollar opportunity for the company. That narrative has also helped support investor optimism even as Tesla’s core EV business faces slowing demand, rising competition and margin pressure. But Tesla’s robotaxi rollout has fallen short of expectations so far, with expansion moving slower than anticipated.
Now, the latest reports around Tesla’s robotaxi services are raising fresh doubts. Long wait times, limited vehicle availability, ride cancellations and poor drop-off experiences suggest the rollout is still far from smooth. With delays continuing and rivals like Alphabet’s GOOGL Waymo already scaling commercial driverless operations, investors are increasingly questioning whether Tesla’s autonomous ambitions are progressing fast enough to justify the lofty valuation.
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TSLA’s Robotaxi Facing Execution Concerns
Tesla’s robotaxi expansion is beginning to show cracks despite the company’s aggressive promises around autonomous driving. Last month, Tesla expanded robotaxi services to Dallas and Houston, but early user experiences appear underwhelming. A Reuters report indicates that customers are facing long wait times, inconsistent vehicle availability and even ride cancellations. In some cases, riders were dropped far away from their intended destinations, highlighting that the service still looks more like a testing program than a mature commercial platform.
The concerns come at a time when Tesla’s messaging around robotaxi expansion is also becoming inconsistent. On the last earnings call, Elon Musk warned investors about delays in the rollout timeline. Earlier, Tesla planned to launch robotaxi services across seven U.S. cities by mid-2026. That target has been pushed back. Musk now expects the expansion into nearly a dozen states by year-end. Constant changes in timelines are creating uncertainty instead of confidence.
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Meanwhile, competition is intensifying. Alphabet’s Waymo is already operating fully driverless Level 4 systems across multiple cities at commercial scale. Waymo currently delivers more than 500,000 paid robotaxi rides weekly across multiple U.S. cities without safety monitors or chase vehicles. Tesla, by comparison, reportedly operates only around 50 robotaxis in Austin versus more than 250 Waymo vehicles in the same city, per Electrek.
Tesla highlighted on its last earnings call that its Full Self-Driving (Supervised) system has crossed 9 billion cumulative miles. However, supervised miles are very different from fully autonomous real-world operations. That gap remains one of the biggest risks for investors banking heavily on Tesla’s robotaxi future.
Tesla’s Long-Term Vision Still Faces Credibility Questions
Well, Tesla is not entirely lacking positives. Management highlighted several encouraging trends on the last earnings call. Vehicle demand appears to be improving, with Tesla ending the quarter with its highest first-quarter order backlog in more than two years. Automotive gross margins also improved sequentially.
Demand seems to be improving in the world’s largest EV market despite strong competitors like BYD Co Ltd BYDDY. In China, Tesla shipped 79,478 Shanghai-built Model 3 and Model Y vehicles in April, including exports, marking a 36% year-over-year increase and the sixth straight month of growth.
Tesla’s energy and storage business also remains a major bright spot. Even though first-quarter 2026 deployments declined in the first quarter on both a yearly and sequential basis, management still expects full-year 2026 deployments to exceed 2025 levels. More importantly, the energy segment continues to be one of Tesla’s most profitable businesses.
Over the past month, shares of TSLA have risen 14%. However, despite the first-quarter earnings beat, Tesla’s broader story is becoming increasingly complicated. The company is no longer being valued as just an EV maker. Investors are now betting heavily on AI, robotaxis and humanoid robots like Optimus. That future requires enormous spending. Tesla recently raised its capital expenditure forecast to $25 billion from $20 billion, with Musk arguing that the investment supports a much larger long-term opportunity. But the payoff remains uncertain and keeps getting pushed further out. The same concerns apply to Optimus. Earlier targets around robot production have already been missed, and Musk now admits output will scale slowly.
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How Should You Approach TSLA Stock Now?
At this stage, Tesla looks more like a high-risk long-duration bet than a buy-now opportunity. The company continues to promise massive future opportunities across AI, robotaxis and humanoid robots, but investors are still waiting for meaningful large-scale execution. The valuation already prices in years of aggressive growth assumptions, leaving little room for further disappointments or delays.
Meanwhile, rising spending and uncertain timelines could continue pressuring sentiment in the near term. That said, Tesla still possesses strong technology capabilities, a powerful brand and multiple long-term growth platforms. Existing investors can hold their positions, but fresh buying at current levels appears difficult to justify now.
The Zacks Consensus Estimate for Tesla’s 2026 EPS has moved south by 4 cents in the past 30 days to $1.99, implying 20% year-over-year growth.
TSLA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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