All eyes are on Tesla Inc (NASDAQ: TSLA) this morning after Zoox, a robotaxi startup backed by Amazon.com Inc (NASDAQ: AMZN) opened a new manufacturing facility in Hayward, CA.
According to the company’s press release, its new site will start with an output of just one robotaxi per day, but has a total production capacity of up to 10,000 robotaxis annually (once fully scaled).
Today’s update from Zoox confirms that it remains fully committed to accelerating production of its custom-built robotaxis ahead of a planned commercial launch later in 2025.
What does Zoox news mean for Tesla stock
Zoox’s new production facility sharpens the competitive landscape in the autonomous vehicles market – an area that experts believe is key to TSLA’s future value.
Tesla Inc is scheduled to launch its robotaxi services in Austin on June 22 – but its billionaire chief executive, Elon Musk, has already hinted the timeline could shift (again) due to ongoing safety concerns.
So, it’s evident that TSLA continues to struggle in terms of fully stretching its wings in the robotaxi market.
Meanwhile, the added competition from Zoox introduces a serious contender with the financial and technological backing to scale quickly.
Tesla stock investors have long priced in expectations of autonomy as a future growth driver.
However, while the EV maker has opted for a software-first approach – using its existing vehicle lineup and full self-driving (FSD) software – Zoox is going all-in on custom-designed vehicles without steering wheels, optimised for shared rides.
If the California-based startup successfully scales and demonstrates strong user adoption, it could prompt a reassessment of TSLA’s lead in the robotaxi space.
All in all, Zoox’s factory launch today serves as a reminder that Tesla no longer stands alone in its robotaxi ambitions, and its valuation could be more sensitive to how quickly others catch up.
What Zoox has achieved so far in robotaxis
Zoox may still be in a pre-commercial stage, but its approach has been rather distinctive.
Unlike Alphabet’s Waymo, which retrofits vehicles such as Geely Zeekr minivans, the startup has designed its robotaxis from the ground up with a “carriage-style” layout – no driver seat, steering wheel, or traditional dashboard.
This allows for optimised passenger experience and autonomous functionality.
According to Aicha Evans, the chief executive of Zoox, her company’s vehicle is a “high-end computer on wheels,” reflecting a heavy focus on hardware-software integration.
Waymo currently leads the US market with over 250,000 paid autonomous rides per week across cities like Phoenix, San Francisco, and Los Angeles.
Zoox, by contrast, has a limited fleet operating in Foster City, San Francisco, and Las Vegas, and has yet to begin public commercial rides.
However, the Hayward facility now gives it the capacity to scale production quickly – something that could help it catch up if execution is successful.
Meanwhile, Tesla’s robotaxi model is yet to be unveiled, and its full autonomy capabilities remain under scrutiny, particularly from regulators.
While Zoox and Waymo focus on Level 4 autonomy (where the vehicle handles all driving), TSLA continues to operate with Level 2/3 features only, requiring driver supervision.
This puts Zoox closer to fully autonomous deployment, at least from a design and intent standpoint.
Tesla’s continued delays in delivering on its promise of autonomous vehicles and the fast-growing competition in that market are starting to make analysts lose conviction in Tesla stock as well.
This is evidenced in Wall Street’s average price target of $306 on TSLA shares, which indicates potential downside of about 7% from current levels.
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