Tesla launched its fully autonomous Robotaxi service in Austin, Texas, on June 22, 2025, as an invite-only pilot featuring 10 to 20 Model Y vehicles equipped with a camera-only version of its Full Self-Driving software.

However, the launch quickly drew scrutiny as videos surfaced showing the robotaxis breaking traffic laws and malfunctioning, prompting the National Highway Traffic Safety Administration (NHTSA) to open an investigation.

Critics have raised concerns about Tesla's reliance on camera-only technology, arguing that it may lead to safety risks, especially in complex driving environments.

Despite its unique selling point of cost efficiency through a camera-only system, there are significant worries regarding the software's reliability, particularly following reports of technical glitches.

The launch comes at a time when Tesla's vehicle sales have declined, with a notable 20% drop in automotive revenue in the first quarter of 2025, raising questions about the company's growth prospects.

Analysts project that if the Robotaxi service proves successful, Tesla's market cap could reach $2 trillion by 2026, although regulatory delays and technical failures pose significant risks.

Elon Musk advocates for the camera-only strategy, claiming it mimics human vision and is more cost-effective, but critics argue this approach increases safety risks.

Tesla is under pressure to provide data on disengagement, lane-keeping, and speed compliance to regulators, with potential consequences including software updates or a temporary suspension of the service.

The NHTSA's investigation highlights the need for a balance between innovation and safety, reflecting broader regulatory challenges facing the autonomous vehicle industry.

The differences between Tesla's rushed launch and Waymo's cautious, thorough mapping and testing approach underscore the challenges Tesla faces in establishing reliability.

Public perception of Tesla's robotaxi service has shifted from initial excitement to skepticism, raising concerns about the adequacy of its technology and implications for public safety.

While the economic potential of autonomous vehicles is significant, promising lower transportation costs, challenges such as potential job losses in driving professions must be addressed.