TLDRs;
Contents
- Tesla updates Robotaxi app terms, signaling paid ride service debut in San Francisco.
- New Robotaxi rides will include safety drivers as per California regulatory requirements.
- Elon Musk remains bullish on Tesla’s AI future, despite weak earnings and slumping EV sales.
- Investors demand short-term profitability, casting doubt on long-term robotaxi promises.
Tesla has quietly updated its Robotaxi app’s terms of service, hinting at an imminent rollout of its paid autonomous ride-hailing service in San Francisco.
The move comes as the electric car giant doubles down on its self-driving ambitions amid waning investor confidence and declining EV sales.
According to regulatory filings and public statements, the service will initially operate under California’s strict guidelines using Tesla’s Full Self-Driving (FSD) software, but with human safety drivers onboard. This approach complies with the California Public Utilities Commission (CPUC), which confirmed Tesla has not yet applied for a permit to operate fully autonomous vehicles without human oversight in the state.
Outside of California, Tesla aims to deploy the Robotaxi fleet in autonomous mode, pending approval in states such as Arizona, Nevada, and Florida.
🚨BREAKING: TESLA TO LAUNCH ROBOTAXI SERVICE IN SAN FRANCISCO THIS WEEKEND! $TSLA
• Tesla plans to roll out its Robotaxi service in San Francisco as early as Friday, per an internal memo
• Service will cover a geofenced Bay Area, including Marin, East Bay, San Francisco, and… pic.twitter.com/fynRt8MCyM— Tesla Archive (@tesla_archive) July 25, 2025
Musk Pushes AI Vision Despite Slump in Core Business
The Robotaxi rollout comes as Tesla faces turbulence across its core business. The company recently posted another disappointing earnings report, with automotive sales dropping 16% year-over-year in Q2 and profits squeezed by the expiration of EV tax credits and geopolitical headwinds.
Tesla shares have fallen over 22% this year, even as the tech-heavy Nasdaq climbs to record highs. Analysts at Canaccord Genuity acknowledged Tesla’s “future-forward” opportunities in AI and robotics but stressed the need for improvements in present-day profit-and-loss dynamics.
“We love growth too, in the here and now,” they wrote.
CEO Elon Musk, however, remains undeterred. On the latest earnings call, he reiterated Tesla’s long-term vision of robotaxis generating passive income for vehicle owners and transforming the transportation industry.
San Francisco Test Follows Small-Scale Launch in Austin
The San Francisco pilot builds on a limited test in Austin, Texas, where Tesla has quietly deployed 10–20 Model Y vehicles equipped with FSD technology. These vehicles operate on roads with speed limits under 40 mph and are supervised remotely by Tesla staff, with safety drivers riding up front.
While the service in Texas has reportedly logged 7,000 miles, it remains far behind competitors like Alphabet’s Waymo, which boasts over 100 million autonomous miles across more than 10 cities including New York and Philadelphia.
The contrast highlights Tesla’s regulatory and technical challenges as it seeks to catch up to leaders in the self-driving space.
Investors Skeptical but Musk Predicts $20 Trillion Valuation
Investor response to Tesla’s Robotaxi progress has been tepid. Goldman Sachs called the Robotaxi program “still small” and noted a lack of technical transparency. Jefferies labeled the earnings call “a bit dull,” signaling little confidence in Tesla’s current momentum.
Despite this, Musk posted on X that he believes Tesla will one day be worth $20 trillion, doubling down on his long-term AI vision. He claimed Tesla’s real-world AI is “much better than Google by far,” fueling debate among analysts about the gap between Musk’s ambition and Tesla’s current standing.
For now, the Robotaxi launch in San Francisco will be closely watched as a litmus test for whether Tesla can turn its bold promises into profitable reality.
