Tesla's robotaxi fleet drove roughly 700,000 paid miles in the second quarter, down approximately 36% from around 1.1 million miles in the first quarter, according to a breakdown of cumulative data the company released on July 232. The quarter-over-quarter decline contradicts the company's narrative of rapid autonomous-driving growth and triggered a stock drop exceeding 13%, Tesla's largest single-session percentage decline in more than a year1,7.
During the Q2 earnings call, CEO Elon Musk and other executives acknowledged the rollout is moving more slowly than expected, striking a markedly different tone from a year ago, when Musk said the robotaxi network would expand at a "hyper-exponential rate" and reach half the U.S. population by the end of 202510. "We're going as fast as humanly possible in scaling Robotaxi," Musk said on the call, "while trying to ensure that we do not harm anyone at all and ideally do not even run over a pet"9.
Tesla's vice president of vehicle engineering, Lars Moravy, said regulatory situations differ city by city. CFO Vaibhav Taneja cited "different kinks on both the software and operations fronts" that the company is working to resolve. Vice president of AI Ashok Elluswamy maintained that robotaxi miles driven are "literally exponential," though he acknowledged the service is in the early part of that curve.
The company said paying customers have traveled a cumulative 2.5 million miles, including 380,000 miles without an in-vehicle safety monitor. Those figures remain far behind Waymo, which has logged more than 220 million autonomous miles through the end of March.
Tesla launched its first robotaxi pilot in Austin in June 2025 and has since expanded to a handful of cities in Texas and Florida. A January investor presentation said robotaxis would reach seven metro areas — Dallas, Houston, Phoenix, Miami, Orlando, Tampa, and Las Vegas — by the end of June. Up until the week of the earnings call, Tesla had only launched in Dallas, Houston, and Miami; it announced Orlando and Tampa service just before the call. Barclays analysts noted Tesla provided no new expansion targets and has not met previously laid-out ones. Service areas in Tampa and Orlando were limited to less-trafficked neighborhoods outside city centers. Reuters tested the service after the Dallas and Houston launches and found long wait times, sometimes with no availability at all.
A Tesla robotaxi was reported going the wrong way down a one-way street the day after the Tampa launch12.
Deutsche Bank analyst Edison Yu kept a buy rating but cut his price target from $465 to $420, writing that robotaxi and Optimus are scaling slower than Wall Street expected4. Yu warned that investor enthusiasm for embodied AI has cooled and that Tesla may go the rest of the year without a major milestone while cash burn increases. Tesla's automotive margins, excluding regulatory credits, fell from 19.2% to 16.3% quarter over quarter. Tesla shares fell 17% for the week, pushing the stock to an 11-month low.
Musk also tempered expectations for Optimus, Tesla's humanoid robot, calling it "the hardest product to scale manufacturing that we've ever made at Tesla" and warning that "the initial portion of the S-curve will be quite flat and long"5.
Former Cruise operations executive Rob Grant characterized Tesla's rapid three-week mapping-to-launch cycle in Orlando and Tampa as a deliberately conservative safety strategy rather than a scaling story, noting that fleet sizes are small and operational domains avoid airports and dense city cores. Grant warned that a single severe fatality could end the project.
ANALYSIS The quarter-over-quarter mileage decline, combined with missed geographic targets and shrinking margins, undercuts the valuation thesis that has priced Tesla as an AI-and-autonomy platform rather than an automaker. The gap between Tesla's 2.5 million cumulative paid miles and Waymo's 220-million-plus autonomous miles quantifies the distance Tesla must close to validate that thesis.