<div id="readability-page-1">After years of hype, Tesla's (TSLA -0.67%) robotaxis are finally here. Though you might call it a soft opening, the electric vehicle (EV) maker's much-vaunted autonomous vehicle (AV) network began taking paying rides on Sunday in Austin, Texas. The company is using just a handful of vehicles to provide rides right now -- just 10 to 20 of its Model Y vehicles rather than the two-person Cybercab that it introduced at an event in October. The robotaxis are operating in a geofenced area with both safety operators monitoring the vehicles remotely and a Tesla employee in the passenger seat who can turn the vehicle off if needed. Only select Tesla customers have been invited to use the robotaxi service so far. After the launch was initially delayed from June 12 to June 22, there was some doubt about whether it would go off last Sunday. Investors sent the stock up 8% on Monday in response to the successful launch, though it gave back some of those gains on Tuesday. Monday's gains lifted Elon Musk's stake in the company by roughly $10 billion. However, Tesla's path to a global robotaxi network as Musk has touted may not be as easy as the company or its investors have liked to think. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjI4MjgvdGVzbGEtY3liZXJ0cnVjay1yb2FkLmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjI4MjgvdGVzbGEtY3liZXJ0cnVjay1yb2FkLmpwZyZ3PTcwMA"/>Image source: Tesla. </div> <h2>Tesla faces competition</h2> When Elon Musk first proposed the robotaxi network in 2019, the idea was more novel. At the time, Musk also said that Tesla would have 1 million robotaxis on the road by 2020, which clearly didn't happen. In 2025, Tesla may even be late to the robotaxi party. For example, Alphabet's (GOOG 2.30%) (GOOGL 2.70%) Waymo is now operating in six cities, including Austin, and is in the process of adding more, including Miami and Washington, D.C. Waymo provided 250,000 paid rides per week in the first quarter, or nearly 4 million for the entire quarter, showing that Tesla will have to scale its robotaxi network significantly in order to compete with Waymo. General Motors has abandoned the Cruise AV program, but there are other AV networks in the works such as Amazon's Zoox. Volkswagen is also planning to launch a robotaxi network with its ID.Buzz electric van next year as well. In China, there is also a number of robotaxi networks, including Baidu's Apollo, and the technology is advancing quickly in this key Tesla market. <h2>What it means for Tesla</h2> Tesla's competitive advantage isn't as strong as it once was in both electric vehicles and autonomy. Its vehicle growth has flattened as volume sales of Teslas actually fell in 2024, and that trend continued in Q1 as automotive revenue fell 20%. In Europe, sales have plunged this year. In autonomous vehicles, Tesla's competitive advantage has long been assumed rather than based on business results. Investors like ARK's Cathie Wood have crafted detailed arguments for why Tesla will have a $5 trillion valuation by 2030, relying largely on the robotaxi business, but that's mostly conjecture at this point. Tesla's robotaxi launch came much later than many bulls had imagined, and scaling it up is likely to take longer as well, meaning it could still be years before it has a real business impact. That wouldn't be a problem except Tesla's valuation prices in significant . Currently, the stock trades at a price-to-earnings ratio of 196 based on generally accepted accounting principles (GAAP), meaning investors are pricing in explosive growth, whether that's from robotaxis, the Optimus autonomous robot, or a return to strong growth in vehicle sales. As it stands, Tesla looks like it has more to lose than to gain, especially if it appears to be rolling out the robotaxi network slowly. At this point, the stock is priced for perfection, and it won't take much to derail it. </div>

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Tesla has launched its robotaxi service in Austin, Texas, using a limited fleet of Model Y vehicles. The launch led to an 8% stock increase, boosting Elon Musk's net worth by $10 billion. However, Tesla faces stiff competition from established players like Waymo, which is already operating in multiple cities. Despite high investor expectations, Tesla's growth in both vehicle sales and autonomous technology has stagnated, raising concerns about its future profitability and valuation, which currently stands at a high price-to-earnings ratio of 196.

- Tesla has launched its robotaxi service in Austin, Texas, using a limited fleet of 10 to 20 Model Y vehicles, with safety operators monitoring remotely.  
- Despite an initial stock surge of 8% following the launch, Tesla faces significant competition from established players like Waymo, which is already operating in multiple cities and providing hundreds of thousands of rides weekly.  
- Tesla's competitive edge in electric vehicles and autonomy is diminishing, and the slow rollout of its robotaxi network may hinder its growth potential, leaving investors concerned about the company's high valuation.  

Tesla's Austin Robotaxi Boosts Musk's Net Worth. How Long Can It Last?