Tesla Teases Robotaxi Launch In Texas, But Industry Veterans Question Safety And Readiness: 'If A Company Were Serious…'

Tesla Inc. TSLA has announced its plans to launch a robotaxi service in Austin, Texas, this June, proclaiming “the future is autonomous.” However, this ambitious move faces skepticism from industry veterans and analysts.

What Happened: The company’s official X account stated, “The future is autonomous & it starts in Austin, this June. Thanks to Austin City & Texas DOT for hosting & supporting our efforts to unlock safe & low-cost premium point-to-point electric transport.”

This announcement comes amid mixed signals for Tesla. Former Waymo CEO John Krafcik has publicly questioned Tesla’s readiness, arguing that the company’s Cybercab concept lacks essential safety features. Krafcik stated, “If a company were serious about building a safe robotaxi business, the robotaxi wouldn’t look anything like this prototype.” He criticized the lack of redundant sensors and cleaning mechanisms, highlighting that “a serious robotaxi would demonstrate the primacy of safety.”

Adding to the complexity, Tesla recently secured a transportation charter-party carrier permit (TCP) in California, a preliminary step toward operating a ride-hailing service. However, a California Public Utilities Commission (CPUC) spokesperson clarified that this permit does not authorize fully autonomous rides.

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Why It Matters: Tesla CEO Elon Musk‘s past predictions about autonomous driving have also come under scrutiny. Ten years ago, at an Nvidia Corp. NVDA conference, Musk declared self-driving a “solved problem,” predicting, “We will be there in a few years.” However, as recently as the latest earnings call, Musk admitted that Tesla’s current hardware requires upgrades for full autonomy, acknowledging it as “absolutely painful and difficult.”

Despite these challenges, Tesla’s move into robotaxis is seen as a strategic pivot amid slowing EV sales. Tesla bull Gary Black emphasized the significance of the planned Austin launch. However, analysts at Goldman Sachs project only limited initial revenue, estimating around $115 million by 2027.

Waymo, owned by Alphabet Inc. GOOG, GOOGL, has already completed over 2 million paid robotaxi rides, establishing itself as a leader in the autonomous vehicle market. Investment manager Ross Gerber recently compared Tesla’s Full Self-Driving (FSD) to “a 12-year-old driving” next to Waymo’s system.

Tesla enjoys better momentum and a stronger growth forecast than Alphabet, according to Benzinga Edge rankings. For more insights, sign up for Benzinga Edge.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.