Tesla Robotaxi Scaling Growth Will Be Slow In Near Term: Goldman Sachs

Goldman Sachs analyst Mark Delaney maintained a Neutral on Tesla Inc TSLA with a price forecast of $285 on Wednesday.

Delaney stated that Tesla began robotaxi operations on June 22 in Austin, Texas, for a small group of early access individuals.

The analyst recalled that Tesla had said the initial fleet would likely consist of 10-20 Model Y vehicles.

Also Read: Tesla Stock Rises After Austin DMV Recognizes Company as Official Operator of Autonomous Vehicles

Based on available data on Tesla’s robotaxi launch from news reports and the social media platform X, Delaney’s initial view is that the launch is both a sign of Tesla’s progress with its FSD technology and a sign that scaling in the near term will be slow.

The analyst discussed his views on three key items from the launch and their valuation or stock implications.

Delaney’s initial thoughts on the early rides’ performance generally show a good degree of drive smoothness. Still, one user posted a navigation issue with improper use of a left turn lane. He considered this navigation error somewhat concerning, especially considering the limited number of vehicles on the road.

The analyst also discussed how Tesla’s Austin service currently compares to Alphabet Inc’s GOOGL GOOG Waymo, including the operating area. He writes that the areas and conditions in which the Tesla Robotaxi can operate are currently more limited relative to Waymo. Waymo currently operates 24/7 in ~37 sq miles of Austin, whereas Tesla is limited to 6 a.m. to midnight and in a smaller area of Austin.

Additionally, Delaney mentioned that the Tesla Robotaxi service is only available to a select group of early-access users, while Waymo is available to all users on the Uber app.

On pricing, Tesla is currently charging a flat fee of $4.20 for its rides, while Waymo (operating through the Uber app) is charged like a traditional Uber ride (with pricing shown at the time of booking).  

Delaney noted that the use of an Austin-specific tech stack, a Tesla employee present in the vehicle, and the navigation issue suggested scaling will be slow, implying a delay in the availability of FSD on personal vehicles in a wide operating area.

Separately, the regulatory environment will be key to monitor and could determine the speed of the ramp as well, he said. However, according to the analyst, new federal rules could help speed up AV adoption.  

Delaney remarked that the commercial launch was a step toward Tesla addressing the AV rideshare market (he estimated the demand for AV rideshare in 2030 in the U.S. would be about $7 billion).

Delaney projects fiscal 2025 revenue of $89.5 billion and EPS of $1.10.

Price Action: TSLA stock was down 4.06% at $326.65 at the last check Wednesday.

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