By Chris Kirkham and Abhirup Roy
LOS ANGELES, April 23 (Reuters) - The rollout of Tesla’s fledgling robotaxi business is going more slowly than expected, several Wall Street analysts said, following an uncharacteristically downbeat update from CEO Elon Musk.
Musk over the past year has outlined an aggressive expansion plan for Tesla’s autonomous ride-hailing operation. During Tesla’s first-quarter earnings call Wednesday, he struck a more cautious tone.
Musk told investors he hoped to have robotaxis
and driverless vehicles in “a dozen or so states” by the end of the year, and said the company is taking a “cautious approach” to avoid injuries or fatalities. He offered no new details about a robotaxi expansion to Dallas and Houston that Tesla announced on social media last weekend.
That was a change from last July, shortly after Tesla launched a small-scale pilot robotaxi network in Austin, Texas, when the CEO said robotaxis would be available to “half the population of the U.S. by the end of the year” and increase at a “hyper-exponential rate.”
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Analysts said Tesla is likely contending with the difficult ground game of launching self-driving vehicles at scale – problems that competitors such as Alphabet’s Waymo have been navigating for years as they test the technology across the country. Much of Tesla’s $1.5 trillion market value is tied to investors’ belief that it will soon operate a vast fleet of robotaxis and sell millions of autonomous-driving software subscriptions.
William Blair analysts described Wednesday’s earnings call as “low energy” and said Musk “struck an unfamiliar tone—reserved and cautious—about his usual favorite subjects.”
“The robotaxi rollout has been far slower than expected,” they wrote.
Musk has a long history of unfulfilled promises around self-driving vehicles stretching back a decade. In January 2025, he acknowledged being known as “the boy who cried wolf” on driverless technology, before adding: “There's a damn wolf this time, and you can drive it.”
It was clear from Wednesday’s call that the expected timelines around a large-scale robotaxi expansion are getting pushed back.
During an April 2025 earnings call, Musk said robotaxis would become material to Tesla’s bottom line by “the middle of next year.” On Wednesday, he said robotaxis would likely “not be super material this year,” but “will be material probably in a significant way next year.”
Tesla plans to build its robotaxi business around the Cybercab, a two-seater vehicle designed to be fully autonomous, without a steering wheel or pedals. Musk said Wednesday that Tesla had begun Cybercab production, but reiterated that initial production “will be very slow.” He said “exponential” growth of Cybercab would happen “towards the end of the year and certainly next year,” adding that it eventually would account for "most of our production long term."
Musk also got into the nitty-gritty challenges of rolling out driverless technology at scale. On last April’s call, he said he was confident there would be “millions of Teslas operating autonomously” in the second half of 2026. This time, he said it didn’t make sense to deploy the technology widely ahead of a forthcoming software update that will improve safety.
“The limiting factor for expansion is really rigorous validation, making sure things are completely safe," Musk said.
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Some analysts took the delays in stride.
Morningstar analyst Seth Goldstein said he believes Tesla is being cautious because "the stakes are very high." "They don't want to risk an incident because they weren't extremely safe and weren't 100% confident," he said.
Analysts at Morgan Stanley, who have been bullish about Tesla’s self-driving ambitions, wrote after Wednesday’s call that robotaxi is “progressing slower than investor expectations,” limiting the “near-term upside” to Tesla’s stock price.
Tesla shares were down more than 3% in afternoon trading Thursday.
Barclays analysts noted Tesla still has only a “nominal number of driverless vehicles” and that “investors are awaiting a more significant increase.”
Garrett Nelson, an analyst at CFRA Research, said he believes investors will continue to give Musk a pass if he misses some of the lofty robotaxi expansion targets, as long as the company demonstrates in a few markets that the business is "scalable."
"People who have been following the story for years know that things happen on Elon time," Nelson said.
(Reporting by Chris Kirkham in Los Angeles and Abhirup Roy in San Francisco. Editing by Mike Colias and Nick Zieminski)
