Tesla Stock Takes a Hit Amid Rising Competition

The stock of Tesla (NASDAQ: TSLA) has recently been on an upward trend, with shares increasing by over 15% this past week. However, that momentum appears to be stalling today.

As of 11:40 a.m. ET on Wednesday, Tesla stock was down 4.5%, having dropped more than 7% at its morning low. This decline is attributed to growing competition in the self-driving vehicle sector. A new announcement indicates that Alphabet‘s Waymo and Toyota may soon impact Tesla’s growth strategies.

The Race for Self-Driving Dominance

Tesla investors heavily rely on the company’s self-driving technology for future profit and revenue growth. CEO Elon Musk has stated that those who do not believe in Tesla’s potential in autonomous driving should reconsider their investment in the company.

While competitors are already deploying self-driving vehicles as robotaxis and generating revenue, Tesla has millions of electric cars on the road collecting data. This data could give Tesla a significant edge in the long run.

Waymo claims to provide 250,000 driverless taxi rides weekly in the cities where it operates. Nonetheless, the cost of Waymo’s vehicles may be too high compared to Tesla’s upcoming robotaxi model. Tesla might still be poised to reap substantial profits in the future.

A rendering of the sixth-generation Waymo Driver on Hyundai’s all-electric Ioniq 5 SUV. Image source: Waymo.

Waymo’s New Partnership with Toyota

A recent announcement about Waymo’s partnership with Toyota could be a significant development in the industry. The collaboration aims to combine Waymo’s autonomous technology with Toyota’s vehicle expertise to create advanced personally owned vehicles.

Currently, Waymo operates its driverless vehicles in four U.S. cities. The partnership with Toyota may help reduce vehicle costs, putting pressure on Tesla as it risks losing ground to this formidable competitor. Investors are responding by selling Tesla stock today.

Conclusion

The competition in the self-driving space is heating up, with Waymo and Toyota making strategic moves that could challenge Tesla’s position. Investors will need to monitor these developments closely as they could influence future stock performance.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.