By Chris Isidore, CNN
(CNN) — Tesla’s robotaxi service has been mostly hypothetical so far, but it’s certainly taking the company’s shareholders for a real ride.
Tesla debuted its ride-hailing service using cars with its so-called full self-driving (FSD) tech in Austin, Texas, in June. At the rollout, CEO Elon Musk announced the ambitious goal of serving half the US population by the end of the year.
But by October, that target was reduced to eight to 10 metro areas. And at the start of 2026, robotaxis are available in just two locations — Austin and the San Francisco Bay area — and a company employee needs to be along for the ride in both.
Tesla did not respond to CNN questions about its service.
Shares of Tesla (TSLA), meanwhile, have climbed more than 50% since June to a record-high on Musk’s big promises. Musk previously said the service would greatly change the financial outlook for Tesla, making it the most valuable company on the planet.
But its main source of revenue — electric vehicle (EV) sales — is sputtering, falling by a record 9% in 2025. That makes 2026 a critical year for Tesla. The company must start to live up to its bold promises on robotaxis, or risk losing much of those gains.
“I think in the next six months there’s a reckoning coming for Tesla,” said Ross Gerber, an early Tesla investor and CEO of investment firm Gerber Kawasaki. He’s now a prominent critic of Musk.
“I think once analysts realize that all these (robotaxi) numbers are fantastical and sales (of cars) are still going down, then Tesla’s got a big problem,” Gerber added.
Robotaxi promises, EV struggles
American buyers rushed to buy EVs before a $7,500 tax credit expired on October 1, helping to lift Tesla’s global sales to a record in the third quarter of 2025.
But EV sales plunged soon after. Overall, US sales fell nearly 50% between the third and fourth quarters, according to Cox Automotive.
That left Tesla’s global car sales down 16% in the same period, and lower for the second straight year. That’s a stunning turnaround for a company that at one time had seen nearly 50% increases in sales each year.
Tesla’s problems went beyond the end of a tax credit. There was backlash to Musk’s political activities and involvement in the Trump administration, as well as increased competition, especially from China. Chinese automaker BYD even overtook Tesla as the world’s largest seller of EVs despite not selling in the United States.
That makes Musk’s robotaxi hopes so critical. But overpromising is a long tradition of the CEO, who had said the robotaxi service was on the verge of launching since 2019.
And Tesla is falling further behind the offerings of other companies, like Waymo, the self-driving car unit of Google parent Alphabet.
Waymo said it provided 14 million fully autonomous paid rides without any employees aboard in 2025, totaling 20 million over the past five years. Meanwhile, Tesla has yet to offer a single fully autonomous robotaxi ride. The Waymo service is also available in five metro areas: Atlanta, Austin, Los Angeles, Phoenix and San Francisco.
Yet Waymo’s clear market advantage has not deterred Wall Street optimism for Tesla’s robotaxi service.
“I believe we will have 30 cities for the robotaxis in 2026,” said Dan Ives, analyst for Wedbush Securities and a Tesla bull. “You need to use a brick-by-brick process to build out the most important of growth in Tesla’s history.”
Such bullish assessments seem to discount a less-than-ideal initial rollout. The Austin service has reported eight accidents to the National Highway Traffic Safety Administration, even with employees in the car.
The National Highway Traffic Safety Administration is also conducting a number of i