Waymo Stock and IPO: Should You Invest in Self-driving Vehicles?

Self-driving taxis are popping up in Arizona, Las Vegas, and San Francisco. Autonomous driving company Waymo is at the forefront of developing the technology. But will self-driving cars powered by Waymo and its competitors ever become widely adopted?

Ben Carson   Updated February 3rd, 2022

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What is Waymo?

Waymo began as Google’s self-driving car project in 2009, turning into a separate business unit in 2016. It’s focused on developing its autonomous technology, Waymo Driver, which includes hardware – lidar, radar, cameras, and sensors – and software. The company is based in Mountain View, California, and has over 2,000 employees.

Waymo Driver

Waymo Driver should both be safer and help people who can’t drive (for example, because they are old, blind, or disabled) get around. According to Waymo, 1.35 million people die globally in car crashes each year, including around 36,000 in the U.S. And 94% of crashes involve human error. Unlike human drivers, autonomous cars are patient, signal lane changes and obey the rules.

Waymo One

Waymo One is Waymo’s autonomous ride-hailing service. Waymo has operated self-driving taxis in Phoenix, Arizona, since 2020. And they began testing the service in San Francisco in 2021. While Arizona taxis are fully autonomous (i.e., without a safety driver), San Francisco tests still have a driver present. The San Francisco service uses the world’s first autonomous electric vehicles, too. If you’re in the Arizona metro area, you can try the service by downloading the Waymo One app.

Waymo Via

Waymo Via will be the autonomous solution for long-haul trucks. According to Waymo, truck crashes cause around 4,000 deaths and 110,000 injuries in the U.S. each year. The company is testing autonomous heavy duty trucks in Arizona, Texas, New Mexico, and California. They are also testing deliveries in Arizona using Chrysler Pacifica Hybrid minivans.

Waymo partners and vehicles

Waymo has struck partnerships with car manufacturers like Stellantis (formerly Fiat and Chrysler), Daimler, Volvo, Jaguar, Renault, and Geely. The fleet now includes hybrids and gasoline-powered vehicles like Toyota Priuses, Lexus SUVs, and Chrysler Pacifica Hybrid minivans. But they are committed to electric vehicles and have partnered with Jaguar to create autonomous EVs.

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Can you invest in Waymo?

Waymo is a subsidiary of Alphabet (GOOG), whose business runs on online ads. You can still invest in Google, of course, but you’re not really investing in self-driving technology.

When will Waymo go public?

We don’t know. The market for companies that don’t make money is challenging. Over its 12-year life, Waymo has successfully raised at least $5.5 billion from investors, including Google, Silver Lake, and Tiger Global. The last funding round reportedly valued Waymo at around $30 billion. Although Waymo is burning a lot of cash, it may be able to keep raising funds from private investors. In fact, Waymo’s huge amount of cash burn may suit deep-pocketed Google more than public market investors.

What driverless car stocks can you buy?

Most driverless car companies are either private or part of a much larger business. Tesla (TSLA) is developing autonomous cars, but its main business is EVs for human drivers. Self-driving startup Cruise is a branch of General Motors (GM), which is tied to regular cars. 

Autonomous vehicle startup Zoox was acquired by Amazon (AMZN)Lyft (LYFT) robotaxis, which already drive visitors in Las Vegas, are built by Motional, a joint venture from auto parts supplier Aptiv (APTV) and Hyundai MotorArgo AI, a self-driving taxi startup backed by Ford (F) and Volkswagen, may go public at some point, but so far it’s private. 

However, we have found a couple of driverless car stocks you can buy.

TuSimple (TSP) is a self-driving trucking company that’s publicly listed on the Nasdaq. It still has $4 billion in market cap, even though technology stocks with no revenue aren’t in vogue with investors. Still, many think that self-driving trucks have the edge over cars because truck drivers are very hard to hire these days.

Aurora Innovation (AUR) is a $5.5 billion autonomous driving company that went public in November 2021 through a SPAC merger. It was co-founded by the former Waymo tech chief, as well as the former head of Tesla’s AutoPilot, later absorbing Uber’s autonomous driving unit. Amazon owns about 5% of the company. 

Luminar Technologies (LAZR) is a $5 billion company that makes lidar technology for autonomous vehicles. They have over 50 commercial partners, including 8 out of the top 10 automakers. 

Smaller lidar stocks include Innoviz Technologies (INVZ)Ouster (OUST)Velodyne Lidar (VLDR), and Aeva Technologies (AEVA). These companies are valued at around $1 billion or less.

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Should you invest in driverless car stocks?

Self-driving technology has enormous implications, but the road to broad adoption is challenging, and profits are theoretical. First, the technology itself is hugely complex, even for Google engineers. Waymo’s ex-CEO, John Krafcik, even said that autonomous driving is “a bigger challenge than launching a rocket and putting it in orbit around the Earth . . . because it has to be done safely over and over and over again.”

Besides, self-driving car startups need to persuade the local authorities to let them operate and riders to use the service. And any accident can trigger a backlash, even if self-driving cars are safer on average. Waymo’s Arizona self-driving project required a lot of site-specific testing, so it’s unclear how quickly they can roll out across the country.

Self-driving cars will also be very expensive, partially due to the cost of lidar technology, which adds $500-1,000 per sensor. According to some estimates, the cost of lidars, sensors, and cameras per Waymo car is over $200,000.

Self-driving car projects are burning enormous amounts of cash, while revenues are far off. That’s why ride-hailing companies Uber and Lyft recently sold their autonomous driving units, with Uber’s self-driving division merging with Aurora. The CEO of Waymo, John Krafcik, left Waymo last year after five years at the company. Waymo is now run by co-CEOs Tekedra Mawakana and Dmitri Dolgov. The CEO of GM’s Cruise also departed in late 2021.

So driverless car stocks remain a highly speculative investment.

🔔 Looking for other investments in the future of mobility?  Check out EV ETFs and Transportation as a Service stocks.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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Frequently Asked Questions

Is Waymo a publicly traded company?

No, Waymo is not publicly traded. It has been a separate unit within Alphabet (GOOG) since 2016.

What is Waymo stock ticker?

Waymo is not publicly traded and doesn’t have a stock ticker.

What company owns Waymo?

Waymo is a division of Alphabet (GOOG), but other investors, including Silver Lake and Tiger Global, have bought stakes in the company. The ownership breakdown is not public.