Tesla's ambitious push into self-driving taxis and humanoid robots is progressing far slower than promised, causing mounting concern among investors who are shouldering the heavy financial burden. The electric vehicle maker reported its first quarterly cash burn in over two years, with a negative free cash flow of $3.3 billion, largely driven by aggressive spending on artificial intelligence infrastructure. CEO Elon Musk acknowledged the sluggish rollout of the Cybercab robotaxi and Optimus robot, describing the production ramp as “agonizingly slow.”
Delays vs. ambitious targets
Musk had previously stated that Tesla’s robotaxi service would cover roughly half of the U.S. population by the end of 2025, but the company later shifted to a cautious city-by-city expansion. Despite plans to enter seven additional metro areas by mid-2026, the service is currently operating only in Austin, Dallas, Houston, Miami, Orlando, and Tampa, with limited availability and varying service levels. The purpose-built Cybercab, lacking a steering wheel or pedals, has yet to enter commercial service, and Tesla’s autonomous mileage stands at around 2.5 million miles, a fraction of Waymo’s 220 million miles.
Record deliveries offer little solace
While the core automotive business delivered a record number of vehicles in the second quarter boosted by rising oil prices in Europe, investors remain fixated on the viability of Tesla’s AI endeavors. With approximately $25 billion projected for data center and manufacturing capex in 2026, analysts at Morgan Stanley noted that “investors are increasingly focused on evidence that Tesla’s spending is strengthening its physical AI moat.” UBS maintained its Sell rating and a $352 price target, warning that commercialization of robotaxi and Optimus could take longer than expected, eroding any sustainable competitive advantage against rivals like Waymo and Nvidia.
Shareholder skepticism grows
Retail investors channeled their doubts directly: nine of the top ten questions submitted before the earnings call centered on robotaxi, Optimus, and Full Self-Driving progress. The highest-voted question bluntly asked what was preventing Tesla from meeting its own short-term goals. The stock declined after Musk’s call for patience, mirroring a broader post-earnings retreat among AI-heavy companies such as Alphabet. While Barclays noted that a healthy automotive business could partially fund AI ambitions, the market is clearly demanding tangible proof that the massive spending will eventually yield a return.
