Tesla Robotaxi Milestone: Why Driverless Tests Are Fueling Record Highs Despite EV Slump

Is Tesla truly an automaker, or is it the world’s most valuable Artificial Intelligence firm in disguise? This is the burning question investors are asking as Tesla Robotaxi milestone news pushes the stock to fresh record highs, seemingly decoupling its valuation from the current struggles in its core electric vehicle business.

On December 16th, Tesla stock closed at an all-time high of $489.88, marking a remarkable 21% gain year-to-date, a stunning rebound after a brutal first quarter where shares plummeted 36%. This recent surge—which lifted the company’s market capitalization to approximately $1.63 trillion, making it the seventh-highest globally—was directly fueled by CEO Elon Musk’s announcement: Tesla has begun testing fully driverless, unoccupied vehicles in Austin, Texas.

H2: The AI Pivot: Investors Look Past EV Sales to the Robotaxi Dream

For Western investors accustomed to traditional automotive cycles, this valuation jump is bewildering given reports of cooling EV demand and sales declines in key markets. The market’s thesis has clearly shifted: Tesla is no longer being priced solely on vehicle sales; it is being priced on the promise of autonomous, high-margin mobility services.

H3: The Austin Catalyst: Unsupervised Testing Begins

The key development is the progression from safety-driver-supervised tests to fully autonomous, no-occupant testing in Austin. Musk claims the core unsupervised Full Self-Driving (FSD) challenge is “pretty much solved”.

• Speed of Progress: This move comes just six months after launching the pilot program requiring a safety driver, suggesting an aggressive technical acceleration.
• Valuation Impact: Bullish sentiment suggests this validates Musk’s long-term vision of converting existing EVs into revenue-generating robotaxis via software updates.
• Competitive Landscape: While Tesla pushes driverless tests, established players like Waymo continue to expand their supervised services in multiple US cities.

H3: Wall Street Weighs in on the Autonomous Future

The long-term outlook, while speculative, has analysts issuing aggressive forecasts. Morgan Stanley, for example, projects a massive scale-up:

• 2026 Projection: A modest fleet of 1,000 operational robotaxis.
• 2035 Projection: An ambitious 1 million robotaxis operating across multiple cities, representing a true operational scale.

This potential shift to recurring service revenue is what excites investors, contrasting sharply with the cyclical nature of car manufacturing. See our analysis on Tesla’s production ramp challenges for context on their current auto segment headwinds.

H2: The Volatility Under the Surface: A Reality Check for Western Buyers

While the stock hits new highs, Western observers must note the inherent risks tethered to this AI narrative, particularly concerning regulation and execution.

H3: Regulatory Hurdles and Public Perception

Musk’s polarizing political activities, including his association with the Trump administration and public statements, previously caused significant consumer backlash and stock dips earlier in the year. Furthermore, even as testing advances in Texas, regulatory uncertainty persists; reports confirm a California judge suspended Tesla’s license to sell vehicles in the state for 30 days over deceptive marketing claims regarding Autopilot and FSD.

H3: The Divergence: China’s EV Market vs. US Autonomy Hype

It is crucial for the Western audience to understand that the energy driving this stock rally is largely focused on US autonomy, not necessarily global EV sales volume, which remains uneven. While Tesla navigates these challenges, competitors are solidifying their ground. For instance, rival Waymo is reportedly seeking new financing at a valuation exceeding $110 billion.

Analyst Takeaway: The current price action confirms that for now, the market has bought into the narrative that Tesla is an ‘AI-driven growth story’ first, and an automaker second. Success in scaling autonomous driving is now the primary determinant of the stock’s direction, outweighing traditional automotive metrics.