Tesla’s current rally won’t hold up, much like all the ones that came before 

Goldman Sachs has expressed skepticism about how the market reacted to Tesla’s robotaxi launch in Austin, Texas, on June 22, 2025. 

The EV giant’s stock rose by over 8% on Monday, June 23, following the debut of its autonomous ride-hailing service, which began with a limited number of Model Y vehicles operating in a geofenced area with safety monitors in the passenger seat.

However, the stock has failed to hold those highs, trending downward on Tuesday, June 24.

Goldman Sachs is cautious despite market optimism

On the same day Tesla’s stocks rallied by 8%, Goldman Sachs analyst Mark Delaney in a note cautioned against the optimism, reiterating a neutral rating on the EV maker and sticking to a 12-month price target of $285, equal to 18% downside from Monday’s close.

Delaney admitted that the commercial launch no doubt sets Tesla up for success in the autonomous vehicle market, but pointed out that near-term scaling could take longer than anticipated.

“The use of an Austin-specific tech stack, a Tesla employee being present in the vehicle (albeit on the passenger side), and the navigation/lane issue reported in the first day of use suggests scaling will be slow in the near-term in our view,” he wrote. “We also believe this suggests that it will be some time before consumers can use [Full Self-Driving] on their personal vehicles in a wide operating area.”

Delaney also noted that “some degree of [autonomous vehicles] related profit was already in the stock.”

Tesla’s robotaxi will traverse the selected roads of Austin alongside other similar autonomous vehicle projects like Alphabet’s Waymo, which Delaney said is already ahead of Musk’s EV firm in terms of robotaxi operations.

The analyst also highlighted the Chinese market as another potential obstacle to Tesla’s promised profit margins.

“One downside risk in this dimension is what has happened with the [advanced driver assistance systems] market in China, with many local [original equipment manufacturers] now including hands-free technology as a standard feature or at low cost even for mainstream vehicles (suggesting that if AI technology allows for many entrants in AVs, profits will be diminished),” Delaney wrote.

The next item on Tesla’s agenda faces a steep challenge

Now that Tesla has debuted its robotaxi, the next item on the agenda is executing on Musk’s ambition to refine the software and scale it to millions of vehicles within a year or so.

Industry analysts and autonomous-vehicle technology analysts have weighed in on the feasibility of a rapid expansion, with many stating that it will be extremely difficult for the company to pull it off.

Some highlighted advantages Tesla could exploit to overtake rivals like Waymo and a host of Chinese auto and tech companies. One such advantage is Tesla’s mass-manufacturing capacity, and the fact that it pitched remote software updates for its self-driving upgrades.

The automaker also avoids using sensors such as radar and lidar, like Waymo and most rivals do. Instead, it chooses to depend solely on cameras and artificial intelligence.

“A rollout could be really quick. If the software works, Tesla robotaxi could drive any road in the world,” said Seth Goldstein, a Morningstar senior equity analyst, even as he cautioned that Tesla is still “testing the product.”

Musk has predicted there will be millions of Teslas operating fully autonomously in the second half of next year, highlighting the magnitude of his ambition.

However, since the company has taken an AI-dependent approach, it will have to make sure  the robotaxis get adequate machine training to handle complex traffic “edge cases.”

Philip Koopman, a Carnegie Mellon University computer engineering professor and autonomous-technology pro, believes that it could take many years, an estimate based on how long it took Waymo to come this far.

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