Tesla CEO Elon Musk has reversed his previous stance on robotaxi expansion, shifting from promises of a "hyper-exponential rate" covering half the U.S. population by the end of 2025 to a cautious "city-by-city" approach. During a recent earnings call, Musk and his team discussed software, operational, and regulatory challenges, abandoning talk of a "universal solution." Following the earnings release, Tesla shares plunged over 13% in the worst single-day selloff in more than a year. Barclays analysts noted that "not only did the company fail to provide new expansion targets, it also missed the targets it had previously set." Since launching a small-scale pilot in Austin, Texas in June 2025, the service has only expanded to a handful of cities in Texas and Florida, with operations largely confined to low-traffic suburban areas. Tesla Vice President of Vehicle Engineering Lars Moravy stated: "Regulatory situations differ in every city. We're expanding city by city precisely to ensure we meet all requirements one by one." CFO Vaibhav Taneja added that the company faces various "pain points" to solve on both the software and operational sides, wanting to "iron out these issues with a controlled, small fleet" before large-scale deployment. When questioned about vehicle numbers remaining "in the dozens rather than hundreds," Tesla Vice President of AI Ashok Elluswamy claimed robotaxi mileage growth is "literally exponential, just in the early stages of the exponential curve