Tesla’s pushing into the robotaxi business with plans to launch self-driving cars for hire in Austin next June. The company will start with its own vehicles and safety drivers, testing the waters in a market where competitor Waymo already operates.
Tesla enters robotaxi market in Austin next June, competing directly with Waymo’s existing service.
The electric car maker’s timing comes as it faces serious financial challenges. Tesla’s revenue dropped 12% to $22.5 billion in the second quarter of 2025, marking its worst performance in ten years. Net income fell 16% to $1.17 billion. The company’s struggling with fewer car deliveries, price cuts, and less money from environmental credits.
Tesla’s robotaxi service will use Model Y cars equipped with the company’s Full Self-Driving technology. Unlike Waymo’s approach, Tesla relies only on cameras and artificial intelligence instead of expensive sensors. The cars will start with speed limits of 40 miles per hour during the testing phase.
The Austin pilot program has already logged over 7,000 miles without major safety problems. Customer response has been positive, though the limited number of cars remains a challenge. Tesla plans to gradually expand the service area and fleet size in Austin before moving to other cities.
CEO Elon Musk wants robotaxis operating in half of U.S. cities by the end of 2025. The company’s targeting regulatory approval in the San Francisco Bay Area, Nevada, Arizona, and Florida after Austin. Tesla will also let regular car owners add their vehicles to the robotaxi network next year, creating a new way for them to make money. This ambitious plan positions Tesla to compete with traditional automakers, who are also exploring autonomous vehicle solutions. A comprehensive volkswagen robotaxi strategy analysis highlights their efforts to introduce similar services in urban areas, suggesting an escalating arms race in the robotaxi market. As consumer acceptance grows, the landscape will likely evolve rapidly, with both companies vying for dominance in the emerging sector.
The robotaxi push comes as Tesla faces other pressures. Tariffs, slowing electric vehicle demand, and expiring tax credits could hurt future earnings. The company’s also dealing with production delays for the Cybertruck and other new models. Additionally, analysts are closely examining the tesla model y incentives analysis to determine how these factors may impact consumer interest and sales. As competition intensifies in the electric vehicle market, maintaining a competitive edge through effective pricing strategies will be critical. Investors are eager to see how Tesla will navigate these challenges while continuing to innovate in its offerings.
Musk, who owns 13% of Tesla’s stock, wants more control over the company as it expands into robotaxis and artificial intelligence. Some analysts suggest that Musk’s political involvement may have contributed to Tesla’s declining performance. Success depends on winning regulatory approval and convincing the public that self-driving cars are safe. Tesla expects its Cyber Cab to achieve a cost per mile of approximately 25 cents, significantly undercutting traditional ride-hailing services and competitors. Tesla’s Autopilot technology has demonstrated crashes occur every 7.44 million miles with the system engaged, which is ten times safer than human drivers who crash approximately every 702,000 miles.
Tesla’s also planning to start making Optimus robots in 2026, adding another ambitious project to its plate.