Key Takeaways
Tesla’s vision of an autonomous future is hitting a wall in Texas, where robotaxi users report that a 20-minute ride can take nearly two hours.
Tesla Inc.'s high-stakes robotaxi expansion is facing significant operational hurdles, casting fresh doubt on CEO Elon Musk's ambitious strategy to dominate the autonomous vehicle market. Recent tests of the service in Dallas and Houston by Reuters revealed extensive wait times, frequent unavailability, and navigational failures, problems that challenge the AI-centric narrative underpinning the company's $1.6 trillion market valuation.
"We’re still in the beta version," a remote support agent told a Reuters reporter, encapsulating the gap between Tesla's vision and the current reality for riders.
The service's performance issues were stark. In one Dallas test, a 5-mile trip that would typically take 20 minutes stretched to nearly two hours. The user waited 36 minutes while the app displayed "high service demand" messages before a car was matched, followed by another 19-minute wait for pickup. The robotaxi then took a surface-street route, ultimately dropping the passenger in a parking lot that required a 15-minute walk to the intended destination. On another ride, a Tesla failed to execute a left turn four separate times, seemingly confused by an unusual intersection.
These failures directly challenge the investment thesis for Tesla (TSLA), which is heavily dependent on the company solving full self-driving and unlocking a vast, high-margin robotaxi network. The rocky rollout gives a material advantage to competitors like Alphabet Inc.'s Waymo, which has taken a more methodical approach. In Austin, Waymo operates a fleet of more than 250 vehicles, compared to Tesla's estimated 50, and uses high-definition mapping to ensure reliability before entering new markets.
The struggles in Texas highlight a fundamental split in the race to autonomy. Musk has championed a "works anywhere" strategy, betting that a vision-based system can solve driving without pre-mapped environments. This contrasts sharply with Waymo's cautious, geofenced rollouts. Meanwhile, other players are pursuing a third path. Uber Technologies Inc. is building a multi-partner ecosystem, working with autonomous developers like Nvidia, Zoox, and Pony.ai to mitigate risk and accelerate deployment, rather than shouldering the entire technical and operational burden itself.
Beyond inconvenience, questions around the system's safety and behavior are also mounting. An Austin police lieutenant overseeing autonomous-vehicle safety noted that Tesla's robotaxis consistently drove 5 mph above the speed limit, a practice the company reportedly defended as necessary to keep up with traffic. Since August, Tesla has reported 15 crashes involving its robotaxis in Austin to the National Highway Traffic Safety Administration. While most did not involve injuries, the reports add to a growing file of real-world incidents that attract regulatory attention. The challenges are industry-wide, as evidenced by a separate NHTSA probe into Uber partner Avride after 16 of its robotaxis were involved in collisions.
For investors, the on-the-ground reality in Texas is a sobering counterpoint to Musk's bold predictions. The path to a profitable, scalable robotaxi network appears far longer and more complex than the company's valuation might suggest. Until Tesla can turn a 2-hour ordeal back into a 20-minute ride, its autonomous future remains a distant and uncertain destination.
This article is for informational purposes only and does not constitute investment advice.
