<div id="readability-page-1">There's been no shortage of woes for Tesla (TSLA -0.19%) this year. The company just reported a 13% decline in first-quarter deliveries. The brand is in the midst of an unprecedented crisis due to CEO Elon Musk's political turn, helming the operation known as the Department of Government Efficiency and weighing in on elections across the U.S. and in Europe. And President Donald Trump's tariffs threaten to further weaken the economy, specifically impacting the auto sector. Coming into 2025, Tesla was already struggling as deliveries fell in 2024, marking its first annual decline in unit sales. However, despite those troubles, Tesla stock has been resilient, largely because investors have high hopes for its autonomous vehicle (AV) technology, which Musk said would make Tesla the world's most valuable company. In particular, the Tesla CEO has talked up a robotaxi network from his company, which he believes will be key in achieving that valuation. The company unveiled its Cybercab robotaxi at a launch last October, but the event underwhelmed Wall Street, and it has not yet performed an autonomous vehicle ride. Tesla plans to begin offering autonomous rides in June in Austin, Texas. However, the robotaxi market could get crowded quickly as the company seems to have new competition from Amazon (AMZN 2.01%). <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTQzNjIvYS13b21hbi1nZXR0aW5nLWluc2lkZS1vZi1hLXpvb3guanBnJnc9NzAw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="393" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTQzNjIvYS13b21hbi1nZXR0aW5nLWluc2lkZS1vZi1hLXpvb3guanBnJnc9NzAw"/>Image source: Amazon. </div> <h2>Here comes Zoox</h2> Amazon is a huge company, best known for its e-commerce and cloud-computing businesses. However, the company also has a self-driving car business after acquiring Zoox for $1.2 billion. Zoox has quietly prepared to launch an autonomous vehicle ride-sharing service in several cities across the country, and it could do so before Tesla. Zoox announced recently that it was launching its sixth testing site in the U.S., this time in Los Angeles. Amazon's ride-sharing service is also aiming to begin serving riders in Las Vegas and San Francisco, though it's unclear when. Zoox is different from most of its autonomous vehicle peers as it has four inward-facing seats, allowing for a more social experience than the typical vehicle and it has double doors that allow for easy entry and exit, making it look more like a shuttle van. The company says it's a robotaxi, not a car. <h2>Can Amazon challenge Tesla in AVs?</h2> At this point, it's speculative to assess Zoox's potential in autonomy, but it's clear that the space is becoming more crowded as Alphabet's Waymo continues to spread to new cities and as other companies work toward autonomous ride-sharing. Tesla is also facing deep-pocketed rivals in Alphabet and Amazon, both of which generate tens of billions of annual free cash flow, some of which they can throw at the autonomous vehicle market. Tesla does have a singular advantage with millions of cars on the road, but its full self-driving technology still requires supervision. Launch of the ride-sharing service is expected to include unsupervised full self-driving, available to Tesla owners. If the technology proves to be capable of navigating the roads safely, it could be the game changer that Musk hopes it will be as the millions of Tesla owners could subscribe to FSD and theoretically lease their own vehicles out for ride-sharing -- provided the software is there to support it. However, the arrival of well-heeled debutantes like Zoox shows that Tesla may not dominate the robotaxi market the way the bulls expect. It's also worth remembering the safety risks in AVs. Other companies' autonomous dreams have gone up in smoke, including Uber Technologies and General Motors, which recently pulled all its Cruise vehicles off the road and ended that program. <h2>Better buy: Amazon vs. Tesla</h2> At this point, Tesla seems priced for perfection, and that perfection includes unsupervised FSD and a burgeoning ride-sharing network. Amazon, on the other hand, has a much more diversified revenue base, a cheaper valuation, and better growth prospects, considering the problems with Tesla's EV business. Zoox's ramp-up toward a mainstream AV company is likely to be significantly slower than Tesla's, but safety is the biggest hurdle in the industry, not speed. Overall, Amazon looks like the better buy here. While Zoox might not be a major factor in its business right now, it could be down the road, and it gives investors potential exposure to the robotaxi market. Keep an eye on Zoox over the coming months as 2025 looks set to be a big year for robotaxis. </div>

AMZN

Amazon's Zoox is preparing to launch an autonomous ride-sharing service, potentially competing with Tesla's robotaxi plans. Tesla faces challenges with declining deliveries and competition from deep-pocketed rivals like Amazon and Alphabet. While Tesla has a significant advantage with its existing fleet, Zoox's unique design and Amazon's diversified revenue may position them favorably in the growing autonomous vehicle market. Analysts suggest Amazon could be the better investment due to its valuation and growth prospects, despite Zoox's slower ramp-up compared to Tesla.

- Tesla reported a 13% decline in first-quarter deliveries, facing challenges from CEO Elon Musk's political involvement and tariffs impacting the auto sector.  
- Despite these issues, Tesla's stock remains resilient due to investor optimism about its autonomous vehicle technology and the potential of its robotaxi network.  
- However, competition is intensifying with Amazon's Zoox preparing to launch its own autonomous ride-sharing service, raising questions about Tesla's dominance in the robotaxi market.

Motley Fool

Amazon Could Beat Tesla to This Massive Market. Are Investors Missing Something?