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Waymo will start testing its vehicles in Tokyo next year as the Alphabet-backed company looks to expand its robotaxi operations globally. While the company is not yet starting commercial operations in Japan, it has partnered with the country’s largest taxi operator, Nihon Kotsu, and taxi app GO to test its vehicles in Tokyo.
To begin with, drivers will operate Waymo vehicles manually to map key streets in Tokyo and the data will be subsequently used to train Waymo’s AI systems. The company would use the driving conditions in Japan to test its robotaxis in the US.
Waymo Will Test Its Vehicles in Tokyo
In its statement, Waymo said, “Our upcoming road trip to Tokyo gives us the chance to work alongside local partners, government officials, and community groups to understand the new landscape.”
It added, “We’ll learn how Waymo can serve Tokyo’s residents and become a beneficial part of the city’s transportation ecosystem.”
Waymo Has Been Losing Money
Waymo is part of Alphabet’s Other Bets segment which includes new and emerging businesses that the company is working on. The Other Bets has been posting perennial losses which has been a bone of contention with some investors.
In the third quarter of 2024, Alphabet’s Other Bets segment generated an operating loss of $1.1 billion on revenues of $388 million. Notably, amid pressure from some investors, Alphabet has scaled back on some businesses in the Other Bets segment even as the company continues to expand Waymo operations. Waymo incidentally is the biggest part of the Other Bets segment.
During the Q3 earnings call, Alphabet’s CFO Anat Ashkenazi said, “We are planning to continue to expand our geographic coverage and reach more customers in existing markets and new markets.”
GM Has Exited Robotaxi Business
The timing of Waymo entering Japan is interesting as it comes days after General Motors (NYSE: GM) announced that it would exit the Cruise robotaxi business and would instead focus on autonomous driving for personal vehicles. Cruise, which counted companies like Microsoft as its investors, was Waymo’s biggest competitor in the US
GM’s robotaxi business was burning a lot of cash while the competition in the industry is set to intensify with Tesla launching its Cybercab earlier this year.
In its release, GM said that it won’t fund the robotaxi business any further “given the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market.”
Notably, GM was an early entrant in the robotaxi industry and acquired Cruise in 2016. The company also onboarded third parties like Microsoft and Honda as investors in the self-driving unit. However, GM’s robotaxi operations did not make headway and the company halted the production of its Origin autonomous car in July.
Tesla Unveiled Its Cybercab in October
Tesla also launched its robotaxi which it has dubbed Cybercab in October and expects to start its robotaxi operations next year.
At the “We, Robot” event in October, Tesla unveiled its robotaxi or the Cybercab which is a low two-seater and has no steering wheels or pedals. Tesla CEO Elon Musk is optimistic that the company can sell Cybercab for less than $30,000 even as many analysts doubt that the company can make profits selling the car in that price range.
Meanwhile, many analysts expect easier self-driving regulations under a Trump presidency which would benefit Tesla. The billionaire was among the key backers of Trump who selected him along with Vivek Ramaswamy to head the Department of Government Efficiency (DOGE).
Several analysts have raised Tesla’s target price since Trump’s election with Wedbush’s Dan Ives raising his to a Street-high of $400. “We believe the Trump White House win will be a game-changer for the autonomous and AI story for Tesla and Musk over the coming years,” said Ives in his report.
He added, “Now the next step in this broader Tesla strategic vision begins which is the autonomous and AI era as we believe Tesla remains the most undervalued AI play in the market today.”
Ford Wrote Off Its Stake in Autonomous Driving Startup
Meanwhile, while Musk is quite bullish on autonomous driving and robotaxis, not all share his optimism. For instance, BYD which is the largest seller of new energy vehicles globally previously said that fully autonomous cars won’t become a reality even as the Chinese auto giant has committed to invest $14 billion towards autonomous driving.
In 2022, Ford wrote off its $2.7 billion investment in autonomous driving startup Argo AI and pointed to the massive losses that the autonomous driving industry is posting without any clear revenue and profit roadmap.
Waymo Has Been Expanding Its Operations
Currently, Waymo operates around 700 vehicles in the U.S. across cities like San Francisco, Los Angeles, Austin, and Phoenix. Waymo has also partnered with Uber and its vehicles are available on its platform in Atlanta and Austin.
During the Q3 2024 earnings call, Alphabet CEO Sundar Pichai said, “each week, Waymo is driving more than one million fully autonomous miles, and serves over one hundred and fifty thousand paid rides — the first time any AV company has reached this kind of mainstream use.”
He added that the company has been able to improve Waymo’s unit economics without compromising on safety. That said, Waymo vehicles are currently not foolproof and earlier this year a video showed them honking furiously in a San Fransisco parking lot due to a bug which the company soon fixed.
