Tesla’s robotaxi service saw a surprising decline in the second quarter of 2026, according to the company’s own data released recently. Despite expanding operations to six cities in Texas and Florida and increasing the mix of unsupervised and supervised vehicles, paid robotaxi miles fell by approximately 36%, dropping from about 1.1 million miles in the first quarter to roughly 700,000 miles in the second. This downturn contradicted Tesla’s previous optimistic statements about rapid growth and dominance in the autonomous ride-hailing market.

CEO Elon Musk explained during Tesla’s earnings call that the slow progress stems from the company needing to gather substantial driving data specific to the Cybercab, Tesla’s upcoming two-seater robotaxi model. Unlike Tesla’s existing fleet of millions of Model 3 and Model Y vehicles, the Cybercab lacks the extensive data history required for calibration. Tesla is currently testing retrofitted Cybercabs, equipped with manual controls, to better fine-tune autonomous systems before mass deployment.

Tesla also shifted its messaging on hurdles to robotaxi expansion. While the company had emphasized regulatory barriers as the primary challenge in the past years, Tesla now highlights safety validation as the main bottleneck. Musk stressed caution in avoiding accidents to prevent negative media attention and subsequent regulatory crackdowns. Despite this, Tesla’s VP of AI, Ashok Elluswamy, touted that Tesla’s robotaxis have completed over 380,000 miles without safety operators onboard and claimed zero notable incidents, although 22 crashes involving robotaxis have been reported to federal authorities, including crashes caused remotely by teleoperators.

Looking ahead, Tesla maintains a bullish outlook for robotaxi growth, citing a roughly 10% weekly increase in unsupervised miles since the service’s late 2025 launch. Musk and Elluswamy also touted Tesla’s camera-only sensor approach for autonomous driving, contrasting it with other companies' reliance on lidar and radar. Nevertheless, Tesla’s stock dropped more than 13% following the earnings announcement, reflecting broader investor concern over the company’s slowing core business performance and the robotaxi setbacks.