Waymo’s Driverless Surge Intensifies Tesla Rivalry, Weighs on Shares

Tesla Stock Slips After Two-Day Rally as Musk Highlights ‘Major Valuation Change’ Following Arizona Robotaxi Permit Victory

  • Waymo accelerated its deployment of fully driverless robotaxis, intensifying competition with Tesla and influencing investor sentiment.
  • Tesla received approval in Arizona for a paid ride-hailing service with safety drivers, but has not yet been cleared for fully driverless operations.
  • Elon Musk addressed investor concerns, suggesting a potential valuation increase once Tesla achieves unsupervised self-driving technology and scales production of its humanoid robot, Optimus.
  • Retail investor sentiment about Tesla remains bearish, with some suggesting the company’s valuation may drop if judged by traditional automaker standards.

Tesla shares fell 1.9% on Tuesday to $401.25, ending a two-session gain, amid growing competition from Waymo in the U.S. robotaxi sector. The decline followed a brief dip below $400 last week, marking the lowest level for the stock since September. The competition heightened after Waymo extended its fully driverless robotaxi service to Miami and announced plans to launch in Dallas, Houston, San Antonio, and Orlando before making the service available to the public in 2026.

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Waymo, owned by Alphabet, remains the only company in the U.S. currently operating a paid robotaxi service without human drivers or in-car monitors, deploying a fleet of over 1,500 vehicles. This rapid expansion has raised concerns about Tesla’s position in the autonomous vehicle market.

Regulators in Arizona granted Tesla a permit to operate a ride-hailing service, but the service must use human safety drivers. The company has separately applied to test driverless vehicles without human operators. In Austin, Texas, Tesla is piloting a monitored robotaxi program, where a safety monitor rides in the front passenger seat. Elon Musk aims to launch Tesla robotaxi operations in 8 to 10 U.S. metropolitan areas by year-end, pending further regulatory approval.

In response to the stock’s pressure, Elon Musk said in a post on X that a “major valuation change” will take place once unsupervised self-driving reaches scale, and an even larger shift could occur after the commercial production of Optimus, Tesla’s humanoid robot.

Sentiment analysis on Stocktwits showed bearish views among retail investors, with high message volume. One user commented, “Waymo launching in five more cities! Tesla getting crushed.” Another user remarked that if Tesla were valued similarly to established automakers, its stock price could fall below $30, suggesting it may eventually be priced more like a traditional car manufacturer than a technology company. Year-to-date, Tesla shares have edged down by 0.6%.

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