Tesla and Alphabet's Waymo Chart Different Paths for Robotaxis

Tesla (TSLA, Financials) is moving forward with its plans for robotaxis at a far different pace than Alphabet's (GOOGL, Financials) Waymo. business experts think that the autonomous ride-hailing business might be worth trillions of dollars over the next ten years. These two techniques could help determine the early winners in this market.

Tesla started a test program in Austin in June, and CEO Elon Musk has said that "half the U.S. population" would be able to use it by the end of the year. The business is putting its money on cameras and AI instead of comprehensive maps and more sensors. Musk has said that if the system works in a few places, it can easily spread throughout the country.

Waymo has gone a different way. The Alphabet business has been experimenting since 2017 and currently offers paid trips with no drivers in certain regions, including Phoenix and San Francisco. It uses high-definition maps, a lot of sensor data, and years of slow rollouts to improve safety and responsiveness in the area.

Analysts say the distinction is clear: Tesla's way is cheaper and quicker to scale, but it has more hazards. Waymo's way is slower but thought to be safer in the near term. According to Bank of America analysts, Waymo lost as much as $1.5 billion last year. Morningstar, on the other hand, says that Tesla won't have completely self-driving robotaxis until 2028.

Both companies face regulatory hurdles and community pushback. Waymo's cars have had problems in Austin with interpreting traffic police and even drove into floods. Tesla has also come under fire when one of its cars rushed past a school zone near a college for the deaf.

For investors, the race shows that Tesla is betting on self-driving cars to make up for falling EV sales, while Alphabet is supporting Waymo's slow growth even if the company is losing money.