Tesla Shares Decline Amid Challenges; Robotaxi Launch Looms

After a remarkable two-year surge in the stock market, big tech has struggled in 2025. Notably, Tesla (NASDAQ: TSLA) has seen its shares drop by 15% year-to-date (as of May 15).

This downturn places Tesla among the weakest performers in the “Magnificent Seven” stocks, but this may change soon.

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June is critical for Tesla’s trajectory, prompting a closer look at recent trends and assessing whether it’s a good time to invest before a potential upswing.

Anticipated Developments for Tesla in June

Tesla generates most of its revenue from electric vehicle (EV) sales, but its growth has recently hit a snag. Despite this challenge, CEO Elon Musk appears optimistic about the company’s future.

Musk’s vision extends beyond EVs; he aims to develop an autonomous vehicle fleet, known as Robotaxi, to transport passengers.

According to Tesla’s first-quarter earnings call, Musk plans to launch Robotaxi services next month in Austin, Texas.

Image source: Getty Images.

Investor Cautions: Two Key Considerations

Robotaxi has been a cornerstone of the bullish outlook on Tesla for years. With the company finally ready to launch its first paid service, it will face competition from established players like Uber, Lyft, and Waymo.

Excited about the launch, I also recognize that Tesla has a history of product delays. While Musk’s enthusiasm is apparent, investors should remain grounded; missing deadlines could signal trouble, especially since the success of the AI strategy hinges on Robotaxi’s performance.

If Tesla successfully rolls out Robotaxi in June, investors must still be cautious. Scaling this new service and attracting customers will take considerable time.

Musk emphasized this point by indicating that Robotaxi’s financial impact won’t be immediate, suggesting it may start influencing the company’s bottom line by mid-2026.

Should Investors Buy Tesla Stock Now?

Understanding that Robotaxi will initially contribute little financially is crucial. Tesla shares often fluctuate based on prevailing narratives, both good and bad.

If the Robotaxi service launches as planned, it’s likely the stock price will soar. Recently, Tesla’s stock has begun to rise, yet the factors driving this increase remain uncertain.

Data by YCharts.

While positive developments regarding tariff negotiations may influence Tesla’s recent performance, clarity on these negotiations’ impact is still lacking.

Musk warned investors not to expect too much from the early results of Robotaxi. If delays or failures occur, the stock could face significant declines.

For these reasons, it may be wise to hold off on investing in Tesla at this time. The Austin launch represents just the beginning for Robotaxi, which is projected to become a global operation. Should the initiative prove successful, future investment opportunities will emerge as Tesla evolves from a car manufacturer to an AI-driven company.

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*Stock Advisor returns as of May 12, 2025

Adam Spatacco has positions in Nvidia and Tesla. The Motley Fool has positions in and recommends Nvidia, Tesla, and Uber Technologies. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.