Cathie Wood, CEO of ARK Invest, suggests Tesla Inc.'s (NASDAQ:TSLA) entry into the robotaxi market could trigger a swift transformation of the ride-hailing industry, pointing to Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) subsidiary Google-backed Waymo's recent success in San Francisco as evidence.
What Happened: Wood's comments on X, formerly Twitter, came after data shared by Alex Immerman, Partner at Andreessen Horowitz showed Waymo had matched Lyft Inc.'s (NASDAQ:LYFT) market share in San Francisco, reaching 22% of rides within its operating boundary. Uber Technologies Inc. (NASDAQ:UBER) leads with 55% of the market.
"When Tesla's solution enters the market next year, the transition is likely to shift from 'slowly, slowly' to 'all at once,'" Wood wrote on Sunday.
ARK Investment Management projects Tesla's driverless ride-hailing service could unlock $11 trillion in revenue potential. The firm estimates Tesla's robotaxi rides could cost consumers $0.25 per mile, significantly below current ride-hail costs of about $2 per mile.
With a tiny fraction of cars compared to Uber and Lyft, Waymo is beginning to disrupt the raid-hail market in San Francisco. When $TSLA's solution enters the market next year, the transition is likely to shift from "slowly, slowly" to "all at once". Can't wait!
— Cathie Wood (@CathieDWood) December 15, 2024
Why It Matters: Tesla CEO Elon Musk announced plans to launch ride-hailing services in Texas and California next year, pending regulatory approval. While initial operations may require human drivers in some states, Musk expects to operate driverless paid rides in 2025.
The company recently unveiled its purpose-built robotaxi, the Cybercab, scheduled for production before 2027. Until then, Tesla plans to use its Model 3 and Model Y vehicles for the ride-hailing fleet.
However, some analysts remain cautious. Gary Black, managing partner at The Future Fund LLC, excludes robotaxi revenue from his Tesla valuations until competitive dynamics become clearer.
Black expects multiple automakers to receive approval for unsupervised autonomy simultaneously, suggesting market dynamics will be demand-driven rather than supply-controlled.
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Photo courtesy of Tesla.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.