Where the great transformation fromgas-powered cars to EVs has hit some serious roadblocks, the push into robotaxis continues to gain momentum.
Tesla, again on the downswing for itsvehicle deliveries, is on the upswing, aiming to overhaul ride-hailing like it did the auto industry.
Uber is wheeling and dealing, touting morethan a dozen partnerships, with plans to operate robotaxi services in 10 markets by the end of 2026.
Alphabet's (GOOG, GOOGL) Waymo is seekingnew funding at a valuation of at least $100 billion. And other players like Amazon's Zoox have launched early rider programs before a making a bigger splash in the nascent market.
Similar to AI, the robotaxi market has acertain Wild West appeal. Startups and legacy names are scrambling to claim turf even as the revenue model, regulatory environment, and consumer appetite remains uncertain.
Companies are convinced people yearn for aself-driving future with less traffic, fewer crashes from human error, and the ability to do something else while behind the wheel.
On top of that, robotaxis attempt to solvean economic pothole tied to car ownership. People only use their vehicles for a fraction of the time they own them. It's hard enough knowing that our
increasingly unaffordable $50,000 machines shed value from the second we buy them.
Plus, they just sit there. Why not replacethe concept of relying on a mostly unused but crucial depreciating asset for a no-strings-attached, on-demand substitute?
At some point, perhaps this year, we'llfind out whether people actually want this future as much as the companies think.
Tempering consumer enthusiasm is the flipside of that Wild West appeal. Fender benders, crashes, recalls, weird incidents, and other embarrassing bumps on the road to a full self-driving
destination.
On the weekend before Christmas, awidespread power outage in San Francisco took traffic lights across the city offline. Human drivers had to navigate the mess using their judgment, but
autonomous vehicles, specifically Waymo's vehicles, halted in the middle of roadways. Videos circulating on social media showed the vehicles blocking traffic at intersections with their hazard lights blinking.
After the San Francisco mayor's officecontacted the company about the AI-fueled gridlock, Waymo suspended the ride-hailing service in the area before resuming operations the following day. While there were no accidents or injuries reported from the outages, a different kind of damage had been done.
Tesla CEO Elon Musk posted on his platformX, saying, "Tesla Robotaxis were unaffected by the SF power outage," comparing the operations of his own Robotaxi service with the Waymo's snafu.
But Musk is a stone thrower living in aglass house. California is threatening to ban sales of Tesla vehicles after a judge found the company had engaged in deceptive marketing around its full
self-driving (FSD) and autopilot systems, falsely implying they were fully automated.
And while Musk appeared to be gloatingafter Waymo's mishap, skeptical analysts, like CFRA's Garrett Nelson, say his ambition for an autonomous fleet is weighed down by a record of overpromising and missed timelines.
But investors are buying into robotaxidreams as if anything can happen.
Dan Ives, an analyst at Wedbush, includedin his top 10 predictions for 2026 a scenario supporting a Tesla bull case.
"Tesla will successfully launchRobotaxis in over 30 cities in 2026 and start to scale volume production of Cybercabs starting the true autonomous era for Musk & Co." he said in a note before the Christmas holiday. Tesla's stock, he added, could rise to $800, representing a roughly 60% climb from late December levels.
Next year will be when the AI rubber meetsthe road.