Key Points
Tesla (NASDAQ: TSLA) has been refocusing its business on robots, aiming to ramp up production of its Optimus humanoid robot. However, this is part of a broader push for autonomous machines, including self-driving cars. As usual, CEO Elon Musk has lofty aspirations, but investors need to put them into perspective. And the recent launch of Tesla’s Robotaxi services in Miami offers just the opportunity.
What is Tesla offering?
The Robotaxi that Elon Musk is so excited about is a self-driving car service built on the Tesla vehicle platform. It is a logical next step for Tesla’s electric cars, as the company has long been working on self-driving technology. It could be a big deal, potentially eliminating the need for people to own their own cars. However, that’s likely a very distant outcome.
Right now, Tesla is still building out its Robotaxi business. Miami, Florida, is the latest location to get access to the Robotaxi service. The only other state with Robotaxi service is Texas, where it is available in Austin, Dallas, and Houston. That’s a total of four markets in two states, with one of the states being where Tesla’s corporate offices are located.
Tesla isn’t the only one working on self-driving cars
The problem is that Tesla faces fierce competition in the autonomous vehicle market. Many companies are working on the technology. For example, technology giant Alphabet (NASDAQ: GOOG) has been building out its Waymo service based on its own internal technology. And it is much further along in its expansion.
Waymo offers autonomous taxi services in California in the San Francisco Bay Area and Los Angeles. In Arizona, a Waymo can be called in Phoenix. In Florida, you can hail a Waymo in Miami (the same city where Tesla just launched a RoboTaxi service) and Orlando. In Tennessee, Waymo is operating in Nashville. And in Texas, Tesla’s home market, Waymo services are available in Dallas, Houston, and San Antonio. You can also get a Waymo via Uber (NYSE: UBER), which is partnering with Alphabet, in Austin, Texas, and Atlanta, Georgia.
Doing the math on all of that, Waymo is available in some form in five states and 11 markets compared to Tesla’s 2 states and five markets. Alphabet’s Waymo has a much broader reach than Tesla’s Robotaxi at this point.
Don’t count Tesla out, but be realistic
Tesla’s Robotaxi is definitely a big deal, and investors should be paying close attention to the company’s progress with the technology. However, it is far from the industry leader in the rollout of autonomous vehicle services. It is still early days, so Tesla could catch up and, perhaps, even take the lead. It will likely be easier to enter markets in which another service is already operating. But right now, Tesla is trailing, and investors need to keep that in mind when evaluating Elon Musk’s big Robotaxi dreams.
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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Tesla, and Uber Technologies. The Motley Fool has a disclosure policy.
