Tesla has nearly quadrupled its Cybercab fleet in Austin since September, but faces stiff competition from Waymo and regulatory hurdles as it scales its driverless ambitions.
By Adam Makins·
Tesla’s unusual driverless two-seaters have captured headlines since their Austin debut on September 3, but the company is playing catch-up in a market where first-mover advantage increasingly matters. In just one month, Tesla nearly quadrupled its Cybercab fleet authorized for commercial service in Texas, from 45 to 169 vehicles according to state motor vehicle records. Yet this rapid scaling masks a deeper competitive reality: Waymo’s robotaxi service is operating at an entirely different scale.
Alphabet’s Waymo, which has been quietly refining its autonomous operations for years, now has 1,154 vehicles authorized for commercial use in Texas alone. The company conducts over 500,000 paid rides weekly and has completed 270 million fully autonomous miles. Waymo operates in 15 U.S. markets with 15 more planned, plus international launches coming to London, Tokyo, and Munich. For Tesla, the competitive gap is stark.
Elon Musk’s ambitions for the Cybercab are undeniably enormous. Analysts at Cantor recently emphasized that management expects the vehicle to become Tesla’s largest volume product once production ramps up. This represents a monumental pivot for a company that built its brand on premium electric vehicles. But between Musk’s vision and market reality lies a series of thorny obstacles.
Early adopters in Austin haven’t held back their criticism. The Cybercab’s radical design choices, including butterfly doors, no steering wheel, and absence of traditional mirrors, have drawn complaints about wait times exceeding 45 minutes, incorrect pickups and drop-offs, and mechanical failures with doors and trunks. One Austin resident and former Tesla intern, Ethan McKanna, who has taken roughly 30 Cybercab rides, acknowledged the smooth driving quality but noted the pickup and drop-off experience “was not yet refined.”
McKanna’s broader assessment is telling: Waymo simply feels more mature. The company offers 24/7 service, better customer support, and smoother overall operations despite having faced “harsh braking” issues in its own early days. For Tesla to overcome this perception, improvements must come quickly.
Beyond customer frustrations, regulatory and safety challenges loom large. The National Highway Traffic Safety Administration launched an audit into whether Cybercabs comply with federal safety standards, though Tesla obtained an extension beyond the original September 30 deadline. This scrutiny reflects genuine concerns from first responders and the public alike.
Austin Fire Captain Matt McElearney told CNBC he wants regulation requiring robotaxis without steering wheels or pedals to provide emergency override capabilities. Public safety workers need the ability to take control, steer, or shut down vehicles during emergencies. Additionally, McElearney advocates for ongoing “dynamic certification” throughout a vehicle’s lifespan, recognizing that software updates can alter performance.
Public sentiment poses another challenge. A September 2026 survey found that 50 percent of Americans wouldn’t feel comfortable in a steering-wheel-free robotaxi. Upon hearing about the NHTSA investigation, 70 percent wanted Tesla to pause operations. Winning over skeptical consumers is critical to Musk’s expansion plans.
Tesla’s core business challenges extend beyond robotaxis. Auto sales have stalled, and shares are down 18 percent this year, making Tesla the only megacap tech stock with negative returns. Third-quarter deliveries showed a 2 percent year-over-year decline as Chinese EV makers like BYD undercut prices and gain ground globally. The Cybercab represents Tesla’s attempted escape from this downturn.
Expansion beyond Austin is critical. Tesla plans to launch in San Antonio, Dallas, Nevada, and Florida, where warm weather and favorable regulations attract autonomous vehicle companies. Yet California, where Waymo thrives in multiple cities, remains off-limits for Tesla driverless operations without human backup drivers. This regulatory patchwork underscores how far Tesla still must travel.
Musk predicted last January that Tesla robotaxis would be “very, very widespread” across the U.S. by the end of 2026. That timeline appears increasingly ambitious. If Tesla can overcome technical refinements, regulatory approval, and public skepticism while scaling production dramatically, the Cybercab could indeed become transformative. But right now, Waymo is the clear leader in autonomous ride-hailing, and Tesla faces an urgent question: can it innovate and execute faster than a competitor that’s already operating at scale?
Source: CNBC
