In 2016, nearly every major automaker and a swarm of startups predicted that fully self-driving cars would be on public roads by 2020. That deadline came and went. In 2023, Cruise — GM’s self-driving subsidiary — had its California operating permit suspended after a pedestrian was dragged by one of its vehicles. In 2024, Tesla recalled over 2 million vehicles for its Autopilot system after a multi-year NHTSA investigation linked it to hundreds of crashes. And yet, in Phoenix, Arizona, you can hail a fully driverless Waymo taxi right now.
Waymo, Alphabet’s self-driving unit, is the industry’s clearest success story. The company operates commercial robotaxi services in Phoenix, San Francisco, Los Angeles and Austin, completing over 100,000 paid rides per week as of early 2025. The service has logged more than 20 million miles of autonomous driving on public roads. Crucially, Waymo’s safety record supports its ambition: a study by Swiss Re, the reinsurance giant, analysed Waymo’s 3.8 million driverless miles and found an 88% reduction in property damage claims and a 92% reduction in bodily injury claims compared with human drivers over the same distance.
Why has Waymo succeeded where others have stumbled? The answer is a combination of technological conservatism (its vehicles only operate in geo-fenced areas that have been exhaustively mapped), deep corporate pockets (Alphabet has invested an estimated $20 billion in Waymo) and a relentless focus on safety over speed. Waymo’s approach — purpose-built sensor suites including lidar, radar and cameras, plus high-definition pre-mapped environments — is expensive. Each Waymo vehicle costs roughly $150,000. But it works.
Tesla’s approach, by contrast, emphasises cost and scalability over precision. The company’s Full Self-Driving (FSD) system relies entirely on cameras, eschewing the lidar sensors that Waymo considers essential. Tesla’s argument is that cameras, combined with sufficiently advanced neural networks, can match human-level perception at a fraction of the cost. The FSD system is available as a $12,000 upgrade on any Tesla vehicle. But Tesla’s approach has yet to produce a vehicle that can operate without a human driver ready to take over, and NHTSA’s investigations have highlighted dozens of crashes where the system failed to recognise obstacles.
The autonomous vehicle industry is settling into a fork: the Waymo model (expensive, geo-fenced, fully driverless) versus the Tesla model (affordable, scalable, driver-supervised). The former is generating revenue today. The latter is a bet on software eventually catching up to hardware. Both could succeed — but the timelines are very different.