Waymo, which is backed by Alphabet (NYSE: GOOG) would begin testing fully driverless cars in Los Angeles. It is a path-breaking move not only for Waymo but also for the autonomous driving industry in the US.
The company started testing fully driverless cars in San Francisco last year only and now has the approval to drive autonomous cars in two California cities.
In the next couple of weeks, Waymo would start testing its autonomous Jaguar I-Paces in LA. These cars won’t have a human operator but initially, only the company’s employees would be able to take these rides. Initially, the company would do the trials in Santa Monica but would expand it to other neighborhoods.
After the announcement, Waymo co-CEO Dmitri Dolgov tweeted “Thrilled by the data confirming, once again, how well our ML-based 5th-gen Driver generalizes across cities!”
Following a rigorous cycle of validation and safety readiness evaluation, @Waymo is starting fully-autonomous (no human driver) testing in LA. Thrilled by the data confirming, once again, how well our ML-based 5th-gen Driver generalizes across cities! pic.twitter.com/hd0XU5zecT
— Dmitri Dolgov (@dmitri_dolgov) February 27, 2023
Mauricio Peña, Waymo’s chief safety officer, told Forbes “We’re starting with a dense urban area and are going to expand and scale after we do this initial testing.”
Peña added, “We’re not providing a time line for Los Angeles right now, but are definitely doing all the steps we need to be ready to launch our commercial service.”
Waymo To Test Autonomous Driving in LA
Notably, Alphabet has been under pressure to trim losses in its new businesses including Waymo. In November last year, TCI Fund Management, which holds billions of dollars worth of Alphabet shares, wrote a letter to the company calling upon the management to reduce expenses.
Earlier this year, Alphabet slashed over 12,000 positions which also impacted some roles at Waymo.
TCI said that Alphabet stock is undervalued and called upon the management to scale up its share repurchases. Most Wall Street analysts are also bullish on the stock. We have a guide on how investors can buy Alphabet stock.
While many companies invested in autonomous driving in the last few years, some have cut their bets. Uber was among the first companies to ditch its autonomous driving business and in 2020 it sold the business to Aurora Innovation, a self-driving startup.
In October 2022, Argo AI, an autonomous driving startup backed by Ford (NYSE: F) and Volkswagen shut down. Ford wrote off its investment in the company and took a non-cash charge of $2.7 billion.
Baidu is Also Testing Robotaxis in China
Notably, in late December Baidu started offering robotaxis during the night in Wuhan. During its Q4 2022 earnings call, Baidu said that its autonomous ride-hailing service Apollo Go completed 561,000 rides in Q4 2022, which was 162% higher than the corresponding quarter in 2021.
Baidu stock rose after its Q4 2022 earnings release amid optimism over its AI business. Baidu sees AI as a key growth driver. There is a list of companies that are a play on AI.
Coming back to Waymo testing fully autonomous cars, the news comes days after Tesla issued a recall for its controversial FSD (full self-driving).
Definitely. The word “recall” for an over-the-air software update is anachronistic and just flat wrong!
— Elon Musk (@elonmusk) February 16, 2023
The company’s CEO Elon Musk is not too happy with it being called a “recall” and tweeted that it is an over-the-air update only.
Regulators are Investigating Tesla FSD
Earlier this month, a Tesla car crashed into a stationary firetruck. It was yet another incident of a Tesla vehicle crashing into a stationary emergency vehicle. However, it wasn’t certain whether the vehicle was on Tesla’s autonomous driving system at the time of the incident.
Recently, Tesla disclosed that the DOJ requested documents related to FSD. The SEC is also investigating the company for alleged deceptive marketing practices for the FSD.
Separately, the NHTSA (National Highway Transport Safety Administration) is investigating several cases of crashes, including fatal ones, involving Tesla’s autonomous driving system.
Regulators are also critical of the very name FSD as it is not fully autonomous as the name suggests. Tesla too advises drivers to keep their hand on the steering at the time.
Waymo Tests Driverless Cars while Tesla Waits for ‘Next Year’
Musk meanwhile sees FSD as a key driver and predicted that its price would eventually rise to $100,000. Many Tesla bulls also like the stock for its software capabilities. There is a guide on how to buy Tesla stock.
During Tesla’s Q4 2022 earnings call, Musk said that he does not see any company which is even a “distant second” to Tesla in self-driving. He added, “I don’t think you could see a second place with a telescope, at least we can’t.”
Since 2014, Musk has been talking about Tesla cars getting fully autonomous and the deadline only got extended to the “next year.”
While Tesla investors continue to wait for the long-promised full autonomy, Waymo is now testing fully driverless cars in its second city.
All said, it is still too early to say which companies would eventually emerge as winners in autonomous driving.
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