Tesla’s (TSLA) robotaxi could reshape the auto market, Piper Sandler said.
In a new note to clients, the firm reiterated its bullish stance, citing Tesla’s pioneering work and first-mover advantage in self-driving software. “Tesla is still the most transformative company in autos,” analysts led by Alexander Potter wrote. “Over time, Tesla will likely win.”
The report also warns that as self-driving tech scales, the broader auto market is at risk of major disruption, including fewer vehicles sold, higher utilization of fleets, and a shift toward service-based revenue models. Piper Sandler said Tesla could become a consolidator and identified no other winners in the space.
Tesla is not the first player in the autonomous race. Google’s (GOOG, GOOGL) Waymo launched its driverless taxis in Phoenix in 2018 and now operates fleets in San Francisco, Phoenix, Los Angeles, and Austin. Amazon’s Zoox began testing on public roads in 2023. Tesla opened its robotaxi service to limited riders in Austin this Sunday.
The company also has several competitors in China. Baidu (BIDU) launched its robotaxi fleet in 2022 and reportedly has plans to expand in Europe.
Piper Sandler analysts said other US automakers are falling behind as the future of mobility evolves. GM (GM) and Ford (FORD) are still lagging on software, while Rivian (RIVN) faces execution risks. Stellantis (STLA) has the “steepest hill to climb” with manager turnover and geographic complexity.
“Each company has pros and cons, but none appear as well-positioned as TSLA,” they wrote.
Still, the firm is realistic about the road ahead. It said Tesla’s Q2 results could disappoint and a robotaxi crash could dent the company’s lofty valuation, adding that such an event “appears inevitable.” GM’s Cruise shut its robotaxis operations after one of its cars struck a pedestrian in San Francisco in 2023.
Tesla’s sales have been sagging as the demand for EVs slows and CEO Elon Musk’s politics fueled boycotts and demonstrations worldwide. For its first quarter, Tesla’s revenue of $19.34 billion and EPS of $0.27 both widely missed Wall Street expectations of $21.43 billion and $0.44, respectively.
Its Q1 adjusted profits fell 40% year over year. Its vehicle delivery of 336,681 units was the worst since the second quarter of 2022. Its new car sales in Europe have fallen for five straight months in 2025, down 27.9% year over year in May.
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But Piper Sandler argues that Tesla’s lead in autonomy is only growing as full self-driving (FSD) rolls out in more cities and the Trump administration potentially issues more favorable policies.
