Deepwater Asset Management’s Gene Munster stated that Tesla Inc. could eventually disrupt Alphabet Inc.-backed Waymo by activating its Robotaxi service across entire states rather than expanding city by city. This strategic shift, outlined by Tesla’s AI chief Ashok Elluswamy during the second-quarter earnings call, signals a move toward rapid geographic scaling that Munster believes could challenge Waymo’s current market dominance.

The competitive dynamic hinges on scale and technology. Waymo remains the industry leader in operational volume, providing more than 400,000 weekly trips across 10 major metropolitan markets earlier this year. The company aims to exceed 1 million weekly paid rides by year-end. In contrast, Tesla’s unsupervised robotaxi fleet has reportedly shrunk to roughly 30 vehicles in Austin, Houston, and Dallas, though it uses cameras and AI software instead of the lidar systems employed by Waymo.

Operational Metrics Comparison

Tesla’s expansion strategy relies on reducing the effort required to launch in new cities. Elluswamy told investors that the time to launch in a new city is trending toward zero, with the ultimate goal of operating in entire states as a whole. The company has already expanded from its June 2025 Austin launch into Dallas, Houston, Miami, Orlando, and Tampa, while also running supervised service in California’s San Francisco Bay Area.

Production and Software Progress

Tesla has begun Cybercab production at Giga Texas, although executives did not disclose specific production or fleet volumes. The purpose-built vehicle features no steering wheel or pedals. Early Full Self-Driving V15 software powers the current fleet, with roughly 40% of seven planned improvement tracks integrated. Elluswamy noted that weekly mileage is increasing at a double-digit rate.

CEO Elon Musk tempered the expansion narrative with a focus on safety. "Our goals are very ambitious for robotaxi, but we do need to be cautious about causing any accidents or causing any harm to anyone," Musk said. This caution contrasts with Munster’s bullish interpretation that Tesla is executing on its promise to keep the service safe while learning rapidly.

What the Numbers Show

The disparity between Tesla’s technological ambition and its current operational scale presents a key risk. While Tesla highlights the integration of V15 software and the start of Cybercab production, its active unsupervised fleet of roughly 30 vehicles is significantly smaller than Waymo’s established network. However, Benzinga’s Edge Rankings place Tesla stock in the 88th percentile for growth and the 62nd percentile for quality, suggesting investor confidence in the long-term potential of the autonomous driving platform despite near-term scale challenges.

In pre-market trading on Thursday, TSLA stock declined 5.87% to $352.05.

Tesla Inc. reported second-quarter revenue of $28.24 billion, beating the Street consensus estimate of $25.71 billion. The electric vehicle manufacturer also achieved $100 billion in trailing twelve-month revenue for the first time in its history. Despite the revenue beat, Tesla reported second-quarter earnings of 33 cents per share, missing the Street consensus estimate of 50 cents per share. The company delivered 480,126 vehicles in the second quarter, a 25% year-over-year increase, exceeding the Street estimate of 406,000. Model Y emerged as the top-selling vehicle globally during the period.

Financial Performance

The revenue figure represents a significant increase over the prior-year period. Tesla ended the quarter with digital assets worth $674 million, primarily consisting of Bitcoin holdings, a decrease from $786 million in the first quarter. Active Full Self-Driving (FSD) subscriptions reached 1.48 million in the second quarter, up 56% year-over-year and an increase from 1.28 million in the first quarter. Tesla CEO Elon Musk stated that customers in the U.S. are increasingly purchasing the FSD package, with some prioritizing it over the vehicle itself. Musk remarked that for many people, they are "actually buying Tesla Full Self-Driving with a car attached, as opposed to a car with FSD."

Production and Future Outlook

Tesla is advancing its future technologies, with first-generation production lines for the Optimus Bot currently being installed in anticipation of production in 2026. The company stated that production will happen "soon." The Cybercab is now listed as in production, with the vehicle having begun production during the quarter. This marks an improvement from the previous quarter's expectation of volume production "this year." The Tesla Semi is listed as "commissioning," and the company remains on track for volume production this year.

Key Metrics

Management emphasized that Tesla is in its largest and most exciting period of investment, focusing on maximum capacity utilization at its factories. Deliveries and deployments will depend on demand, and the company expressed that it has "never been more optimistic about the future."