Waymo’s $30 Billion Valuation Shows The New Reality Of Automated Driving Is Sinking In
Waymo is an automated driving company created by Google in 2009. Before 2020, Waymo had not received any investments outside of Google or Alphabet. However, this week Waymo released a surprise announcement that they had received an outside investment of $2.25 billion dollars. For many, this investment constituted a newfound reality of automated driving. Morgan Stanley valued Waymo at $175 billion dollars for its potential leadership position in the automated driving market. Conversely, a year following the initial evaluation Morgan Stanely reduced Waymo’s value to $105 billion dollars. Comparatively, Waymo, despite their slashed evaluation, remains highly valued in comparison to other large companies within the market such as Cruise, valued at $18 billion dollars.
Many are surprised at the welcomed outside investment but should be less than surprised due to the incrementally large scaling costs associated with automated driving. CFO of Alphabet, Ruth Porat, has recently shut down funding to several projects as he realized, similarly to Elon Musk, that automated driving has a long path before it can create a trusted consumer market. Waymo’s limited operating ride-hail service in Arizona only worked to confirm logistical challenges and costs that were not previously recognized. For now, Waymo is most concerned with its ability to license its Driver platform to automakers and create a solid return on investment.