The launch of the Tesla self-driving taxi service in Austin was supposed to be another triumph for Elon Musk. Instead, it demonstrated the deep gap between market expectations and technological reality. It highlighted the underestimation of the true industry pioneer, Waymo, the Alphabet subsidiary. The robotaxi launched nearly 20 Model Y vehicles as prototypes to test operational challenges such as unexpected stops and navigating intersections.
This media storm, which often happens with Tesla, immediately affected the market. Tesla stock price fluctuations have become the object of close attention from speculators, and the paradox is that even negative news about the service drives up the giant’s shares.
Up to 60% of Tesla’s phenomenal capitalization of $1.05 trillion is based solely on expectations of the success of its autonomous taxi business. The market estimates Tesla’s potential robotaxi service at about $600-700 billion. For comparison, Waymo’s entire capitalization is estimated at only $45 billion. Tesla is worth more than the next twenty automakers combined.
While Tesla is testing two dozen cars in one city, Waymo has long and successfully operated a fleet of more than 1,500 fully self-driving cars without a safety driver in several key locations: Phoenix and its suburbs, San Francisco, Los Angeles, and soon Austin. The scales of operation are incomparable:
- More than 250,000 paid trips per week.
- Millions of autonomous miles have been accumulated on public roads.
- One of the best safety indicators in the industry, with data from California and Arizona traffic accident reports.
- A full-fledged commercial service available through the app.
- Strategic partnerships like those with Uber Eats for food delivery in some regions.
In 2024, Waymo confidently attracted $5.6 billion in investments, confirming its valuation of $45 billion. This is a serious amount that demonstrates trust. However, it’s just $45 billion compared to $600-700 billion of Tesla’s autonomous park.
Every statement, every announcement, or failed launch of Elon Musk instantly becomes world news. Tesla is constantly in the spotlight. Alphabet’s Waymo is much more restrained and methodical, focusing on security and gradual scaling rather than high-profile press releases.
Investors believe in Musk’s “magic” and ability to revolutionize industries. Tesla’s capitalization is a bet on its future vision, often at the expense of current results.
Waymo has been working on autonomy since 2009. Their approach was initially based on creating a full-fledged autonomous vehicle rather than gradually improving driver assistance systems like Tesla’s. This is more difficult and requires more time and resources, but it leads to creating a truly autonomous solution.
As Waymo is a subsidiary, Alphabet doesn’t disclose its financial statements separately. Its success and scale are less noticeable to many investors than Tesla’s public profile. Investment rounds are rare events that draw attention to their real value.
Waymo is not just a startup, but a technology leader with 15 years of experience, real revenue, and a vast base of proven autonomous miles. The current market value of $45 billion may look very attractive to those who believe in the victory of reality over rumor. The Austin Tesla experiment only highlighted how undervalued Waymo is today.