Waymo, the self-driving division of tech giant Alphabet (GOOGL), is more than doubling the size of its robotaxi service area in Austin, Texas, from 37 to 90 square miles. Unsurprisingly, Waymo is trying to stay ahead of rivals like Tesla (TSLA) in the autonomous ride-hailing market. With the new coverage, Waymo now serves areas like Crestview, Windsor Park, Sunset Valley, Franklin Park, The Domain, and McKinney Falls State Park. The company also has over 100 vehicles running on Uber’s (UBER) platform in the city and offers 24/7 fully driverless rides, which is something that Tesla doesn’t provide yet.
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Tesla, meanwhile, recently tested a small fleet of supervised Model Y robotaxis in a limited 42-square-mile zone in Austin. These rides are invite-only and only operate from 6 a.m. to 12 a.m. And unlike Waymo, which uses sensors like lidar and radar, Tesla relies solely on cameras and artificial intelligence. Tesla believes that this simpler approach will help it scale faster and cheaper. Indeed, analysts estimate that Tesla’s vertically integrated model could cut per-mile costs by 30% to 40% compared to Waymo. However, Tesla still faces big challenges in making its service fully driverless and getting regulatory approval to operate at a larger scale.
In addition, even with Tesla’s plans to have hundreds of thousands—or even millions—of robotaxis on the road by 2026, Waymo currently holds a strong lead. In fact, Waymo already has about 1,500 autonomous vehicles operating across major cities like San Francisco, Los Angeles, Phoenix, and Atlanta. Furthermore, the company just hit a major milestone of 100 million driverless miles. Nevertheless, the winner of the robotaxi race may come down to which company can grow the fastest without compromising on safety or rider satisfaction.
What Is the Prediction for Tesla Stock?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 13 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $298.97 per share implies 6.3% downside risk.
