While Tesla (NASDAQ: TSLA) recently confirmed it will begin production of its Cybercab in June, it is becoming increasingly apparent that the company has a robotaxi problem. The company reported five more crashes involving its robotaxi fleet in Austin, Texas, bringing the total to 14 since its launch last June. While most of the crashes have been minor fender benders at low speeds, one did result in hospitalization.
While only 14 crashes doesn’t seem like a lot, according to reports, that equals about one crash every 57,000 miles. By comparison, according to Tesla’s own data, American drivers are involved in a collision every 229,000 miles, while according to data from the National Highway Traffic Safety Administration, police report a collision every 500,000 miles. So Tesla’s robotaxis are involved in a crash at a rate of four to eight times more often than human drivers — that’s not good. Notably, all these crashes also involved a human driver serving as a safety monitor in the front seat.
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Meanwhile, the company continues to struggle with licensing and marketing issues in California. In a filing with the California Public Utilities Commission, Tesla noted that its vehicles in the state have a safety driver in the vehicle and also use remote assistant operators.
Notably, this is why Tesla was able to navigate its small robotaxi fleet in San Francisco during a blackout while Waymo struggled. It wasn’t because of some technological advantage; it was actually because of its use of humans, both in the car and helping remotely. Alphabet’s Waymo also has remote assistance operators for edge cases, but with a much larger fleet, its operators were overwhelmed.
This all came about because the company is fighting with Waymo in California. It has been arguing that its “robotaxi” operations in the state should be outside of autonomous driving rules, essentially admitting its vehicles aren’t autonomous vehicles under California law.
In the same breath, though, the company is fighting a proposal from Waymo that Tesla can’t use the words “driverless,” “self-driving,” or “robotaxi” in its marketing in the state. Tesla already lost a ruling in December that its use of the terms “autopilot” and “full self-driving” broke state false-advertising rules.
With Tesla’s core electric vehicle (EV) business struggling and the stock trading at a forward price-to-earnings (P/E) ratio of 199 times analyst estimates for 2026, a lot of investors’ hopes and dreams are pinned on the company’s robotaxi and robotic ambitions. While it appears the company can build cheap Cybercabs, what hasn’t been proven is that it has a safe, autonomous driving system.
Meanwhile, all of CEO Elon Musk’s earlier robotaxi predictions have failed to come to fruition. According to publication Electrek, Tesla only has about 42 robotaxis operating in Austin, with fewer than 20% available during operating hours. That’s a far cry from the 500 he promised in Austin by the end of 2025. Tesla also hasn’t come close to expanding to the eight to 10 cities that it projected to be in by the end of 2025.
At some point, Tesla actually has to deliver with robotaxis. If it doesn’t, its stock is in danger of collapsing, given its valuation and weak core business, which saw sales drop last year and operating margins contract.
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Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Tesla. The Motley Fool has a disclosure policy.
Tesla Has a Robotaxi Problem, and That’s Bad News for Its Stock was originally published by The Motley Fool
