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Ross Gerber, the well-known investor and Tesla bull, recently expressed skepticism over the company’s Full Self-Driving (FSD) technology, highlighting that it lags behind Alphabet’s Waymo in terms of safety and reliability. In a social media post, Gerber compared Tesla’s FSD’s performance to that of a “12-year-old driving,” implying that the system is not yet sophisticated enough for full autonomy. This critique comes at a crucial time for Tesla ($TSLA), which has been aggressively pushing its autonomous driving technology as a key element of its long-term growth strategy. Tesla has been rolling out incremental improvements to FSD via software updates, promising it will eventually become a true self-driving system. However, concerns persist regarding its readiness, particularly as regulatory bodies continue to scrutinize autonomous vehicle safety. Meanwhile, Waymo, a subsidiary of Alphabet ($GOOGL), has already deployed fully autonomous robotaxis in cities like San Francisco and Phoenix, gaining traction without requiring constant driver intervention.
The comparison to Waymo underscores a fundamental difference in approach between Tesla and its competitors. Tesla relies on computer vision and artificial intelligence to process data from its existing fleet, whereas Waymo employs a more structured system of sensors, including LiDAR, to map its environment with high precision. This divergence has led to varying results, with Tesla’s FSD still requiring significant improvements before achieving full Level 4 or Level 5 autonomy. The financial market has responded to these developments in mixed ways. While Tesla remains a dominant force in the EV industry, Waymo’s advancements present a real challenge, particularly as autonomous driving technology is expected to become a major differentiator in the market. Investors are keeping a close eye on Tesla’s progress in this space, as its ability—or failure—to deliver fully autonomous technology could significantly impact its valuation.
Gerber also touched on how the rapid advancements in autonomous driving might affect the ride-hailing industry, particularly Uber ($UBER). If self-driving cars from Waymo and Tesla become mainstream, they could drastically reduce operating costs for ride-hailing platforms, eliminating the need for human drivers. However, until Tesla’s FSD reaches full autonomy, companies like Uber continue to depend on human labor, a cost burden that affects profitability. Uber has been investing in its own autonomous vehicle research but lags behind Waymo in deployment progress. If Waymo’s self-driving taxi services grow at scale, it could put significant pressure on Uber’s business model, raising concerns about how the company will adapt to the technological shift. Investors have been observing this landscape closely, as Uber’s future could hinge on either leveraging or competing against fully autonomous solutions.
Overall, the debate over Tesla’s FSD versus Waymo raises broader questions about the future of self-driving technology and its financial implications. Tesla’s stock movements have often been influenced by news regarding FSD advancements, with bullish investors betting on its eventual success. However, if Waymo continues to lead in real-world deployment and earns regulatory approvals before Tesla, Alphabet could emerge as the primary beneficiary in the autonomous mobility space. Meanwhile, ride-hailing services like Uber will need to pivot strategically, either partnering with self-driving companies or accelerating their own technological development to remain relevant. With self-driving technology on the brink of widespread adoption, the competition among Tesla, Waymo, and Uber could reshape the automotive, tech, and transportation industries in ways that investors are watching closely.
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