That’s what Tesla CEO Elon Musk said after revealing the company’s robotaxi test would start on June 22, later than expected, adding that the date could “shift” beyond that. Meanwhile, betting site Polymarket lists only a 30% chance that Tesla (TSLA) launches the service before July, highlighting Musk’s rosy predictions on self-driving that have been constantly pushed back.
While Tesla is on the verge of starting a new chapter for the company, Alphabet’s (GOOG) Waymo has been quietly racking up mile after mile, trip after trip, providing actual paid robotaxi rides to customers in San Francisco, Phoenix, Los Angeles, and Austin — where Tesla’s test will begin.
At stake is a huge opportunity for companies like Waymo, Tesla, and others. Goldman analyst Mark Delaney estimates the market for traditional ride-hailing in the US is worth approximately $58 billion currently, but could be worth more than $330 billion by 2030, with robotaxi-type services pushing the industry forward and reducing costs by — among other factors —not requiring a human driver.
Waymo has an early lead, and it seems a big one. Rivals like Argo AI and GM-backed Cruise are gone, leaving only smaller players like Zoox (backed by Amazon), China’s Pony AI (PONY) and WeRide (WRD), and of course Tesla.
The Jaguar I-PACE with the 5th-Generation Waymo Driver is displayed at CES 2025 in Las Vegas, Nevada, USA, on January 9, 2025. The vehicle offers an insight into the evolving world of autonomous electric driving with next-level AI-powered capabilities. (Photo by Artur Widak/NurPhoto via Getty Images) ·NurPhoto via Getty Images
Waymo (before it was even called that) started off as an in-house startup as part of Google’s X initiative way back in 2009.
After some testing and securing of permits, the project officially became Waymo in 2016, and it started testing its Pacifica hybrid vans kitted out with cameras, LIDAR laser sensors, and radar.
In 2018 Waymo and Jaguar paired up, using the British automaker’s I-Pace EV for its testing; these are the vehicles most users are accustomed to seeing.
Waymo’s combination of vision, radar, and LIDAR, which the company calls its “multimodal” approach, has the company claiming it has the best, and safest, robotaxi solution.
Since 2020, anyone in a service area can download the Waymo app and hail a fully autonomous car. Waymo says it has the most robotaxi miles driven and that the company performs around 250,000 trips a week.
Waymo sensors at work at night. (credit: Waymo) ·Waymo
A Waymo spokesperson said that the company has not yet seen a vision-only system that can achieve the levels of safety its current system has achieved, asserting that multiple sensors with overlapping fields of view are the best solution.
Experts tend to agree.
“Waymo is undoubtedly the leader in autonomous driving technology, with their self-driving software (SDS) being widely regarded as best in class,” said University of San Francisco engineering professor William Riggs, an expert in autonomous technology. “They have been around the longest, had patient capital and have the most miles on the road proving that self-driving tech works.”
Riggs believes Waymo’s software strategy combined with its diversified sensor suite, along with its manufacturer partnerships such as Chrysler, Hyundai, Zeekr, and Toyota, allowed Waymo to maintain a strong presence in the market and adapt to different vehicle platforms.
A robot cab from Google’s sister company Waymo, based on a vehicle from the Chinese car brand Zeekr, can be seen at the CES technology trade fair. Photo: Andrej Sokolow/dpa (Photo by Andrej Sokolow/picture alliance via Getty Images) ·picture alliance via Getty Images
Autonomous expert Katie Driggs-Campbell of University of Illinois’ Grainger College of Engineering agrees.
“Initially, I believe their strength came from the computer vision/learning and compute expertise from Google,” Driggs-Campbell said, noting that Waymo has now “blended real-world experience, recorded data, and simulation [generated] data to form a reliable system.”
Waymo also touts its safety record, as well as how open it’s been with data.
“We have an incredibly rigorous safety framework in place, and our safety record speaks for itself,” Waymo’s spokesperson said, adding that the company has been voluntarily sharing safety performance data with the public, which goes beyond regulatory requirements.
Waymo’s approach could not be more different from Tesla’s, and that has contributed to the dominant lead it sees currently.
Tesla did not immediately respond to Yahoo Finance when seeking comment. But per Musk biographer Walter Isaacson, Musk was enamored with Tesla’s vision-only, neural network-powered self-driving system when it was presented to him. He deemed it superior to Tesla’s prior system, which ran on millions of lines of code using a rules-based system fed by data coming from radar and LIDAR sensors.
Tesla’s current FSD (full self-driving) and robotaxi software use only a vision-based system powered by a neural network “brain” that is constantly training itself using videos collected by millions of Tesla vehicles. (And as opposed to Waymo, Tesla has reportedly asked the city of Austin to block release of safety records related to its robotaxi launch.)
While Waymo holds a big early lead, what could stop the pioneer from growing more could be its operations and manufacturing ability.
Riggs believes building vehicles at scale remains a significant hurdle for Waymo.
“Currently, they operate between 700 and 1,000 vehicles in their major markets and are producing roughly 1,500 vehicles annually. This relatively modest production volume could become a bottleneck for scaling their operations further,” he said.
The other challenge for startups like Waymo in general versus Tesla is that their costs per vehicle are higher.
The 360 vision system with its cameras, radar panels and lidar sits atop Waymo’s all-electric Jaguar I-Pace SUV in San Francisco, California, U.S., August 20, 2021. Picture taken August 20, 2021. REUTERS/Nathan Frandino ·REUTERS / Reuters
Waymo’s self-driving tech and sensors reportedly cost $100,000 plus the cost of the vehicle itself (for example, the Jaguar I-Pace retails for $73,875 in the US). While some of those costs have come down, scaling to new cities and providing enough vehicles to take on Uber, for example, will require more than the 1,500 vehicles currently produced a year.
Tesla, meanwhile, has the ability to produce 2 million or more EVs a year, which include the hardware necessary for its FSD and robotaxi software. Tesla also has millions of vehicles on the road that could be converted for robotaxi use, though that would require the company’s Hardware 4 autopilot software, which only started rolling out in early 2023.
“AI runs off of data. Waymo is trying to close that data gap with more sensors per vehicle; Tesla is looking to win with more vehicles with targeted data specific to their vision-only approach,” said Ken Johnston, vice president of data and analytics at tech consulting firm Envorso and former exec at Ford and Microsoft.
“Companies like BYD and Tesla also cannot be ruled out, as they continue to innovate and expand their capabilities in this space,” Riggs added. Xiaomi is also testing autonomous driving in China, but the company has suffered from safety issues in early trials.
Johnson is bullish on Tesla’s robotaxi offering, but the company faces a big challenge in surviving its safety test. Uber’s self-driving unit and GM’s Cruise could not overcome high-profile accidents.
Testing the service without any accidents in a semi-urban environment is not easy. And unlike Waymo, Tesla is under federal investigation for its autonomous software. It also still needs to provide NHTSA with answers to how it plans to roll out its robotaxi program.
Meanwhile, Waymo is plugging along, adding more cities to its list of current operations, with Atlanta, Miami, and Washington, D.C., coming online in 2026.
Being backed by Alphabet helps too, giving Waymo capital runway for growth, investment, and long-term community outreach.
Waymo’s technological lead and strong backing from Alphabet clearly have the service in pole position. But this race is far from over.
Pras Subramanian is the lead auto reporter for Yahoo Finance. You can follow him on X and on Instagram.
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