Tesla vs. Waymo: The Battle of the Robotaxis

$Tesla Motors(TSLA)$   CEO Elon Musk expects the company to launch its long-anticipated Robotaxi service tentatively on June 22 in Austin. $Alphabet(GOOG)$  's Waymo and Tesla's Robotaxi will have their first head-on confrontation on the streets of the United States.

Musk previously said that Tesla will launch with around 10 Robotaxis in week one. "It will probably be at 1,000 within a few months." While Tesla is on the verge of starting a new chapter for the company, Waymo has been quietly racking up mile after mile.

Waymo launched this service in 2020 and has introduced geofenced service across several US cities, including Los Angeles, San Francisco, Phoenix, and Austin, completing more than 10 million driverless trips.

Can Tesla Robotaxis Catch Up to Waymo?

Waymo conducts approximately a quarter million paid Robotaxi rides per week. In San Francisco, the price of $6 per mile is close to the level of traditional ride-hailing, and the market share is close to Lyft. Can Tesla Catch Up Before Waymo Pulls Away?

Robotaxi Fleet Size

While Waymo holds a big early lead, what could stop the pioneer from growing more could be its operations and manufacturing ability.

"Building vehicles at scale remains a significant hurdle for Waymo,”said University of San Francisco engineering professor William Riggs, an expert in autonomous technology.

Waymo aims to operate 2,000 Waymo vehicles over the next year. In contrast, Tesla's fleet size is expected to expand to 35,000 vehicles by 2026, according to a Bloomberg Intelligence Analysis.

Robotaxi Cost

Unlike Tesla, which mostly relies on AI and cameras for its “Full Self-Driving (FSD)” capabilities, Waymo relies on expensive lidar technology. In fact, Tesla's autonomous vehicle cost '1/7' that of Waymo's, according to a Bloomberg.

The newer generation of Waymo Robotaxi uses a customized version of the Zeekr Mix minivan from China. It is equipped with 13 cameras, 4 LIDAR sensors, and 6 radars. In contrast, Tesla takes a completely different approach and goes AI + vision only to drive. So it just has 9 cameras.

Critics have called into question FSD's ability to safely navigate the streets through routine weather such as fog and rain, as well as sunlight that blinds the cameras, without extra sensors that act as a backup. Musk has defended the company's approach, arguing that the extra sensors are an unnecessary expense and add“noise”that confuses the system.

Autonomous Technology

Bloomberg technologyhost Ed Ludlow says, "Tesla's Full-Self Driving (FSD) technology, while classified as Level 2 like most other vehicles offering autonomous features (Waymo's vehicles are currently at Level 4), could be closer to reaching full autonomy than peers. Tesla's manufacturing capability is a core differentiator vs Waymo, who faces vehicle production constraints. No other incumbent US or European carmaker offers full self-driving capabilities on city roads.”

"This is a major endeavor for Musk and Tesla,” Wedbush analysts led by Dan Ives said in a research note, as "the vast majority of valuation upside looking ahead for Tesla is centered around the success of its autonomous vision taking hold with this vital launch in Austin ahead.”

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