Comparisons Between Waymo and Tesla Miss How Strange the Robotaxi Race Is

Tesla’s valuation has been amazing lately, closing at a record high of $489.88 earlier this month and still hovering near that astronomical figure as of this writing. Tesla bulls, particularly Wedbush Capital’s Dan Ives, say it’s because Tesla is on the cusp of successfully deploying taxis, and that Tesla’s stock price could rise to $800 next year.

Thursday’s New York Times report reads like a valiant attempt to talk rationality to anyone who believes the Wedbush Tesla narrative. It won’t work, because Tesla is selling a wild fantasy that wasn’t mentioned in the Times article.

Central to the Times report is the observation that in Austin, the city where Tesla has proven its concept as a Robocar manufacturer and operator, an estimated 30 self-driving taxis have supposedly hit the roads since June, a very dismal number compared to Waymo’s 200 taxis in the same city since March. The source the Times links to for Tesla statistics is a site called teslarobotaxitracker.com, which is run by an Austin robotaxi enthusiast named Ethan McCanna.

The Times notes that every Tesla self-driving taxi with passengers still has a human safety monitoring device — while Waymo’s fleet is unmonitored — at least inside the vehicle.

The Times isn’t the first to claim Waymo is ahead of Tesla. “I don’t think Tesla has anywhere near the amount of passenger-only self-driving miles that Waymo has (96 million for Waymo, as of today). The safety data is pretty compelling for Waymo, too,” Jeff Dean, chief scientist at Google DeepMind — which shares parent company Alphabet with Waymo — wrote on Twitter earlier this month.

Tesla CEO Elon Musk responded to Dean by making one of his famously bizarre predictions: “Waymo had no real chance against Tesla. That would be obvious in hindsight.”

However, there is one problem with any comparison between Waymo and Tesla right now, which is that Waymo’s business faces some major hurdles, and they may be related. Last weekend, Waymo was forced to stop its service in San Francisco when its vehicles got stuck at dark stop signs. It turns out that Waymo’s lack of safety drivers may have contributed to the problem, since the shutdown was prompted by congestion caused by the high volume of Waymo’s software requests for human feedback.

But more importantly, the bull case for Tesla’s Robotaxi service doesn’t appear to depend on existing ride-hailing service that relies on Model Y cars as self-driving taxis. This is likely to be based on a large-scale rollout of a two-seater car without a steering wheel or pedals called the Cybercab that Elon Musk unveiled in 2024 and is claimed to be available for purchase by the end of 2026.

The supposed silver bullet for e-taxis is that people will ostensibly buy them, use them for their transportation needs, but other times release them into the wild as robotic servants that earn them passive or passive income. This would theoretically benefit Tesla because it would depend on Tesla’s app ecosystem, and Tesla would get a share, while car owners would have to deal with charging, maintenance, insurance, cleaning, and everything else annoying about owning a car.

We know that Elon Musk has in mind that he will bring roughly a million e-taxis on the road — or at least a mix of hundreds of thousands of Model Y taxis alongside e-taxis. We know this because if Tesla doesn’t deploy at least 1 million self-driving taxis, Elon Musk won’t get all of his infamous $1 trillion paycheck.

The Times article isn’t wrong to quote experts who say Tesla is “far behind Waymo.” But it includes paragraphs like these that make the near-religious faith in Tesla’s future revenues seem even more mystifying than it is:

Some analysts also doubt whether self-driving taxis will generate trillions of dollars in revenue, as Mr. Musk has predicted, or whether they will be highly profitable. For revenues to reach hundreds of billions of dollars, many people will have to give up their personal cars in favor of taking taxis, which is unlikely any time soon, said Michael Tindall, an analyst at HSBC Bank.

Not that the Times is comparing apples and oranges. It’s as if they’re comparing good apples containing worms to magic apples from a wizard who claims his apples can grant wishes, but no one can get one yet. It is more questionable and fanciful that the very reasonable adults in the room even allow their claim to sanity. But wait, let’s wait and see what the wizard has in store for us.