<div id="readability-page-1"><p>With its robotaxi service debut just around the corner, shares of <strong>Tesla</strong> <span>(TSLA<span> -6.89%</span>)</span> traded nearly 4% lower, as of 11:12 a.m. ET today. There are a few potential reasons for the sell-off.</p> <h2>Possible concerns over robotaxi safety</h2> <p>It's been an eventful week for Tesla and CEO Elon Musk, who has been vocal in his opposition against President Trump's &#34;one big beautiful&#34; bill pending in Congress. But I think investors may be more focused on Tesla's upcoming limited robotaxi launch in Austin, Texas, which is reportedly starting next week.</p> <div><p><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjA3MTIvc2VsZi1kcml2aW5nLTItZ2V0dHkuanBnJnc9NzAw?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-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjA3MTIvc2VsZi1kcml2aW5nLTItZ2V0dHkuanBnJnc9NzAw"/></p><p>Image source: Getty Images.</p> </div> <p>Yesterday, Bloomberg reported on a fatal car accident in 2023 involving Tesla's assisted-driving technology. The business publication also said it was one of the most-read stories on the website. However, it's important to note that the accident occurred under different software than Tesla is using now, which previously relied on 100% driver supervision.</p>  <p>Furthermore, <em>The Washington Post</em> and Tesla have been in an ongoing legal battle because the <em>Post</em> is trying to obtain crash data related to Tesla's Autopilot and Full Self-Driving (ASAD) technology.</p> <p>The data is submitted to the U.S. National Highway Transportation Safety Administration (NHTSA), but most of the data is redacted due to confidentiality policies. In a filing related to the lawsuit, Tesla, according to the electric vehicle and Tesla news site Electrek, said the company &#34;would suffer financial and economic harm if the requested information is disclosed.&#34;</p> <h2>Robotaxis drive the valuation</h2> <p>As I've now said many times, Tesla's extremely high valuation is not built on its core electric vehicle business, which is struggling, but on future initiatives like full self-driving (FSD) technology and the potential robotaxi service that Musk has talked about.</p> <p>I don't necessarily doubt Tesla's ability to play a large role in the FSD wave, but there are still a lot of uncertainties about the new sector and the technology. There's also likely to be plenty of competition.</p> <p>If FSD comes up short of expectations, I suspect Tesla's valuation would take a hit, which is why I don't love the risk-reward proposition right now.</p>                                                                            </div>

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<p>Shares of Tesla (TSLA) fell nearly 4% amid concerns over the upcoming robotaxi service launch in Austin, Texas. Investors are worried about safety issues following a recent report on a fatal accident involving Tesla's assisted-driving technology. Additionally, Tesla is engaged in a legal battle with The Washington Post over crash data related to its Autopilot system. The company's high valuation is largely based on future initiatives like full self-driving technology, but uncertainties and competition in this sector raise concerns about its risk-reward proposition.</p>

- Tesla's shares fell nearly 4% amid concerns over the upcoming robotaxi launch in Austin, Texas, and safety issues related to its assisted-driving technology.  
- A recent report highlighted a fatal accident involving Tesla's technology, although it used older software that required full driver supervision.  
- The company's high valuation is largely based on future initiatives like full self-driving technology, but uncertainties and competition in this sector could negatively impact its market position.

Why Shares of Tesla Are Sinking Today