Title: Waymo, Alphabet's Autonomous Driving Unit, Poised for Massive Growth by 2025 - Morgan Stanley Analysts Predict
Investing.com -- Waymo, Alphabet's autonomous driving unit, has experienced a surge in adoption recently. According to analysts at Morgan Stanley, by 2025, Waymo could capture a significant share of the rideshare markets in key cities like Phoenix and San Francisco.
The growth of Waymo's business is evident, with a reported 10x increase in weekly trips compared to the previous year. By August 2024, Waymo was conducting 100,000 trips per week, a substantial jump from 10,000 trips in May 2023. This rapid expansion is supported by its entry into new geographies, such as neighborhoods in Los Angeles, airport services in Phoenix, and the San Francisco Peninsula.
The number of miles driven by Waymo has also skyrocketed, particularly in its most mature market, Phoenix, which saw a 350% year-over-year increase in the first half of 2021. The company is expected to continue on this growth trajectory by 2025, driven by technological advancements and geographic expansion.
Morgan Stanley's base case predicts that Waymo will achieve a 4% market share in Phoenix and 3% in San Francisco, translating to projected revenues of $76 million and $64 million respectively in 2025. The partnership with Uber is crucial for Waymo's success, as some trips in Phoenix will be facilitated through the Uber platform.
Currently operational in four cities, Waymo has ambitious plans for expansion, with San Francisco, Los Angeles, and Austin scaling at twice the rate of Phoenix. The pace of city launches will play a vital role in determining the size of Waymo's business by 2025.
While revenue growth projections are strong, challenges like technological hurdles, safety concerns, regulatory requirements, and investment needs remain. Morgan Stanley analysts caution that while Waymo's business is expected to grow significantly by 2025, widespread adoption of autonomous vehicles across all cities may still be a distant goal.
In summary, Waymo, Alphabet's autonomous driving unit, is poised for substantial growth by 2025, with revenue expected to reach $180.9 million across all markets. The partnership with Uber, expansion into new cities, and technological advancements are key drivers of this growth. However, challenges such as regulatory requirements and safety concerns could pose obstacles to achieving full autonomy in the near term. Investors should keep a close eye on Waymo's developments as it navigates the evolving landscape of autonomous driving technology.