Insights
By:
Waymo
Why Waymo leads the autonomous vehicle race
The sight of modified cars with spinning sensors on London streets signals the accelerating growth of autonomous vehicles
For years, fully autonomous vehicles (AVs) seemed like an exciting technology perpetually stuck in experimental phase.
Today, however, we are in the early stages of commercial AV deployment, most notably in the US and China, with public trials taking place in countries including the UK, Singapore and Japan.
One reason why the market’s enormous potential is set to be unlocked is that legislation has reached the point where it allows fully driverless AVs.
Furthermore, the recent explosion of advanced AI and machine learning, falling hardware costs, massive capital infusions and, most importantly, proven safety data have helped accelerate progress.
The main players: Waymo and Tesla
The global autonomous driving landscape is dominated by a mix of technology giants, specialised robotaxi platforms, and traditional automakers.
China has several prominent AV players including Baidu Apollo and Pony.ai operating domestically across key cities. However, the highest revenue-generating market globally is the US, where the two biggest players are Waymo, owned by Alphabet, and Tesla. Their approaches to autonomous driving are very different.
Tesla has adopted a vertically integrated model: it manufactures its vehicles and develops its own software, including the Tesla ride-hailing app. It offers the potential for Tesla owners to convert their vehicles into a robotaxi service via software upgrades, akin to an Airbnb-style model.
Waymo, in contrast, has opted for an asset-light approach, partnering with third-party vehicle manufacturers to deploy its driverless technology and leveraging established ride-hailing platforms to broaden access.
The two firms also differ in vision technology. Tesla’s cars navigate using vision-only camera systems, and they seek to solve driving challenges everywhere at once using powerful AI neural networks to interpret what those cameras see.
Waymo uses LiDAR (remote sensing technology), radar and cameras – providing a 360-degree view – and seeks to master one city at a time with high-definition maps (geofencing).
Its autonomous driving technology – known as the Waymo Driver – takes information it gathers in real time, combines it with the data gathered over nearly 200 million miles of real-world driving and leverages AI to anticipate what other road users might do. Waymo's published safety data show that Waymo Driver is significantly better at avoiding injury-causing crashes than humans.
Scaling fast
Waymo currently handles around 500,000 paid trips per week and expects that number to double by the end of 2026.
Geographically, it is scaling fast. Having established dominance in Phoenix, San Francisco, and Los Angeles, Waymo is expanding to more than 20 new cities in 2026. These include high-density areas like Miami, Atlanta, and Dallas. It is also making its first international forays into London and Tokyo.
Partnering with network platforms like Uber, Lyft and DoorDash reduces customer acquisition costs by leveraging their established user base, allowing Waymo to grow in a cost-competitive way.
It is also diversifying its fleet. Unlike Tesla, it does not manufacture its own cars, preferring to partner with Jaguar and Hyundai. New vehicle partnerships and the latest generation of Waymo Driver are designed to reduce hardware costs and improve profitability.
Waymo is well positioned in a market that is growing rapidly. Based on estimates from Morgan Stanley, AV miles are expected to more than double every year to 2032, reaching around 16bn miles driven. While comprising only 0.5% of total US miles driven, that would mean Waymo accounts for 30% of US rideshare miles.
The pace of AV adoption is likely to depend on two factors. One is cost per mile of car ownership. Currently, AV cost per mile, including Waymo’s, is above non-AV cars. This is, however, coming down, and greater AV switching/adoption is likely once the cost per mile nears parity.
The other factor is safety – a key reason (along with reliability and privacy) people consider switching to AVs.
According to Waymo, its safety level is multiples higher than human drivers and early autonomous peers. As of 2026, Waymo Driver had an 82% reduction in injury-causing crashes compared to human drivers, and 83% fewer airbag deployments. Waymo’s safety advantage appeals not only to consumers but also regulators, helping speed up approvals.
The Alphabet advantage
Waymo benefits from being under the Alphabet umbrella in ways that independent startups or traditional carmakers cannot match.
Alphabet’s visionary management team provides the backing that allows Waymo to prioritise safety and long-term scaling over immediate quarterly profits. The recent capital raise included significant participation from Alphabet itself, and CEO Sundar Pichai’s compensation package now explicitly includes performance units linked to Waymo’s growth over the upcoming three-year period.
As part of Alphabet, Waymo can leverage Google’s world-class mapping infrastructure. Using Google Maps and Street View data as a foundation for its HD maps gives it a considerable head start when entering new international territories. The integration of Google’s Gemini AI into Maps deepens the navigational intelligence available to Waymo’s autonomous systems.
Waymo also utilises Alphabet’s custom TPUs (Tensor Processing Units) and cloud infrastructure to train its "large world models". This access to top-tier AI talent through DeepMind and specialised hardware keeps its machine learning ahead of the curve.
Finally, there is significant potential for future integration with Gemini, providing a built-in user acquisition funnel that costs virtually nothing. An AI agent that has access to a user’s calendar, email and travel schedule could seamlessly plan and schedule an AV – reducing friction and accelerating AV adoption.
Despite its lead, Waymo still faces challenges. Competition from Tesla and Chinese AV firms could pressure margins over time. Technical and operational challenges, such as dealing with adverse weather conditions, and regulatory obstacles remain.
However, Waymo’s strategic competitive advantage – its compounding safety and data moat built over more than a decade – creates a structural edge very difficult for newer entrants to quickly replicate.
What was once science fiction is now science fact. AVs have arrived – and Waymo, with its safety performance, operational experience and Alphabet-backed resources, has one of the strongest positions in a potentially vast market.
Disclaimer
This communication has been prepared for information only and is not intended for onward distribution. It is neither an offer to sell, nor a solicitation to buy, any investments or services.
Issued by Stonehage Fleming Investment Management Limited, authorised and regulated by the Financial Conduct Authority (FRN. 194382).
Stonehage Fleming Investment Management Limited is now part of the Corient group of companies. Corient refers to the separate but affiliated entities under common control of Corient Global HoldCo Limited.
