Tesla's Tightrope: Balancing Declining EV Sales and Robotaxi Ambitions

Tesla is grappling with declining electric vehicle sales and the complex journey of launching an autonomous driving business. During Wednesday's earnings call, CEO Elon Musk announced plans to secure regulatory approval to launch robotaxis in multiple states, targeting half the U.S. population by year-end.

While Tesla currently operates a small fleet in Austin, Texas, open to the public, regulatory challenges, especially in California, loom large. Despite his ambitious projections, Musk noted potential rough quarters ahead, as Tesla's auto sales have dipped 13% in the first half of the year, compounded by the phasing out of a $7,500 tax break for EV buyers.

Despite falling shares and mounting investor anxiety, Musk remains optimistic about robotaxi expansion. California's regulators have yet to issue necessary permits, significantly delaying the initiative. As Tesla continues to seek approvals in other states like Arizona and Nevada, the timeline for full-scale operations remains uncertain.

(With inputs from agencies.)