© <a href=”https://upload.wikimedia.org/wikipedia/commons/d/d3/Waymo_Chrysler_Pacifica_in_Los_Altos%2C_2017.jpg” target=”_blank” style=”font-size: 100%”>Waymo Chrysler Pacific…</a> (<a href=”https://creativecommons.org/licenses/by-sa/4.0/deed.en” target=”_blank” style=”100%”>CC BY-SA 4.0</a>) by <a href=”https://commons.wikimedia.org/wiki/User:Dllu” target=”_blank” style=”100%”>Dllu</a>
Tesla’s (NASDAQ: TSLA) stock trades at a high valuation for several reasons. Today, this has nothing to do with car sales. Its unit sales in the EU dropped 48% in October. Its market share in the US has fallen, though it still leads all competitors. In China, the world’s largest EV market, its market share has become small. That leaves investors with CEO Elon Musk’s plans for a fully self-driving car and a robotics business, both in early stages.
The robotaxi and fully self-driving car sector has become crowded. The strongest companies are several in China and the US leader, which is Alphabet’s (NASDAQ: GOOG) Waymo division. Waymo is currently in 14 markets, which include one in Japan. It will add 10 to 12 markets soon, and London is among these.
The fact of the matter is that Google has more financial resources than Tesla. Additionally, Waymo has been in the market since 2009 and has clocked millions of miles. It has partnerships with over 100 communities.
Most importantly, Waymo has a partnership with Uber (NYSE: UBER), which could bring its technology to every city in the US and many overseas cities once government bodies approve it.
And that is Waymo’s strength. It can partner with any car company worldwide.
Waymo does not have a manufacturing business as Tesla does. Tesla is like Apple (NASDAQ: AAPL). It is a walled garden.
In theory, Waymo could be in the global Toyota (NYSE: TM), GM (NYSE: GM), and VW fleets at the same time.
Tesla needs to win the self-driving car race to support its market valuation. Waymo does not have the same challenge. It is not critical to Alphabet’s future. But it is Tesla’s archenemy.