EV maker Tesla’s (TSLA) robotaxi rollout in Texas is reportedly being plagued by errors such as dropping customers at the wrong destination and long waiting times.
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According to a Reuters article, its reporters have recently tested Tesla’s robotaxis in Texas and found them to still be in a ‘beta-testing phase.’ Tesla announced an expansion of its robotaxis to Dallas and Houston last month.
The reporters found that the service was plagued by long wait times and sometimes no availability at all. It was reported that drop-off spots on some of the rides were far away from the customer – or rider’s – actual destination.
A reporter using the service in Dallas recently spent nearly two hours to take what typically would be a 20-minute drive from the campus of Southern Methodist University to Dallas City Hall. The car eventually dropped the reporter off at a parking lot which was a 15 minutes walk from his destination. There were also issues with availability of rides on the Tesla booking app, leading to long wait times.
Tesla did not comment for the report.
What Does it Mean For Investors?
But the news will be worrying for Tesla and its investors who remain confident that the company is on the verge of unleashing a huge fleet of self-driving robotaxis in the U.S.
Indeed, last year chief executive Elon Musk said that Tesla robotaxis would serve half the population of the U.S. by the end of 2025. It also raises some doubt about Musk’s pledge that Tesla’s self-driving technology “works anywhere” and hopes of an earnings boost.
During its recent Q1 earnings call, Musk said robotaxi contributions “will not be super material this year,” adding that they are expected to become “significant next year.”
At the same time as its Texas troubles, competition is rising. Alphabet (GOOGL) unit Waymo and Amazon (AMZN)-owned Zoox are both moving faster toward broader robotaxi deployments. That puts more focus on Tesla’s ability to match both safety and scale.
Is TSLA a Good Stock to Buy Now?
On TipRanks, TSLA has a Hold consensus based on 12 Buy, 12 Hold and 5 Sell ratings. Its highest price target is $600. TSLA stock’s consensus price is $403.86, implying a 9.25% downside.
