Tesla's Robotaxi Rollout Meets a Mountain of Unsold Cars

Tesla faces a record inventory build-up of 50,000 vehicles ahead of earnings, while cautiously expanding its driverless robotaxi service to Dallas and Houston.

Tesla's share price, hovering around €338, finds itself caught between two competing narratives. On one hand, the company is methodically expanding its futuristic robotaxi service into new cities. On the other, its core automotive business is grappling with a record inventory glut, setting the stage for a tense quarterly earnings report.

The electric vehicle maker produced approximately 408,000 vehicles in the first quarter of 2026 but delivered only about 358,000. This gap of roughly 50,000 units represents the largest inventory build-up in Tesla's history. Analysts are keenly awaiting management's explanation after the market closes on Wednesday, particularly regarding the impact on free cash flow and the potential for further price cuts to stimulate demand. Year-to-date, the stock is down nearly ten percent, despite a recent rally of over twelve percent in the past seven days that has lifted it from deeper lows.

Against this operational challenge, the autonomous driving division continues its measured advance. On April 18, Tesla launched its driverless robotaxi service in Dallas and Houston, marking the next phase after Austin and San Francisco. The rollout, however, is deliberately cautious. In each new city, service began with just a single active Model Y Juniper vehicle. For context, Austin, which launched in June 2025, now operates a fleet of around 80 cars, with an estimated 4 to 12 running without human supervision.

The initial operating zones are tightly defined. In Dallas, service is concentrated in areas like Highland Park, Uptown, and Downtown. Houston's launch is limited to a 20 to 25 square mile area around Jersey Village in the city's northwest, partly due to the region's high rainfall; Tesla suspends operations during precipitation, significantly limiting availability. The technology is still proving itself, with 14 to 15 accidents reported since the Austin launch began.

Morgan Stanley analysts have labeled the geographic expansion "tangible progress," viewing it as a material development of Tesla's ecosystem. The company has pledged to offer the service in seven U.S. cities by mid-2026, with Phoenix, Miami, Orlando, Tampa, and Las Vegas targeted for the first half of the year. Achieving this pace depends on both regulatory approvals and continued advances in Full Self-Driving (FSD) software.

Confusion also emerged from Tesla's other major robotics initiative. Wang Hao, Vice President of Tesla China, initially called the Shanghai Gigafactory a "golden key" for mass-producing humanoid Optimus robots, sparking speculation. He walked back those comments on April 19, clarifying there are currently no concrete plans for robot serial production in Shanghai. While the plant has "strong scalable production capacity," the focus remains on electric vehicles and energy storage.

The broader investment thesis for 2026 is being driven by enormous capital expenditure plans, estimated at around $20 billion. This spending is largely earmarked for the construction of the Terafab AI computing facility and the ongoing development of the Optimus robot. The market increasingly values Tesla as a "Physical-AI" platform, a framing that supports a premium valuation but also creates lofty expectations.

All eyes are now on the upcoming earnings report. Whether the recent stock recovery can be sustained hinges largely on one key metric: the automotive gross margin. If it shows significant pressure from the historic inventory overhang, the optimism from the robotaxi expansion may quickly fade.