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Just a few years ago, the idea of driverless taxis roaming city streets still felt like a futuristic fantasy despite decades of promise. Today, it’s a growing reality. With Waymo's rapid rise in ridership and Tesla’s highly anticipated Robotaxi launch in Austin, the autonomous vehicle (AV) revolution has shifted gears and is no longer a question of if, but how fast. ABSI this week explores the growth of Waymo and the promise of Tesla in the AV space. 

According to the Visual Capitalist, Waymo, Alphabet’s (owner of Google) autonomous driving unit, has quietly hit a major inflection point. The company now completes more than 700,000 rides per month across two cities in California, San Francisco and Los Angeles, a 55x increase from August 2023 when they were completing 12,617. The growth isn’t just limited to California. Waymo also operates in Phoenix, Austin, and Atlanta, with plans to expand to Miami and Washington D.C. next and its first international expansion to Tokyo. In Phoenix alone, Waymo’s operational area has expanded 35x since 2022, now covering over 315 square miles.

This data represents a sharp acceleration. In 2021, Waymo’s ridership was niche. Today, it’s operating one of the world’s largest and most mature commercial autonomous vehicle services. The growth isn’t just happening in isolation; it’s happening in cities known for complex traffic and human unpredictability, and it's happening without a safety driver onboard, making it all the more notable.

Source: Visual Capitalist

It is important to appreciate that Waymo isn’t alone in this AV pursuit. After years of speculation and hype, Tesla officially launched its Robotaxi service in Austin, Texas in June 2025. The rollout began with a limited fleet of fully autonomous vehicles operating in a geo-fenced area of South Austin. These vehicles have no steering wheels or pedals, and rides are currently invite-only, with an initial flat fare of $4.20.

Unlike traditional AV rollouts that have taken years to test and approve, Tesla’s approach is more aggressive. The vehicles are operating without a human driver, though Tesla has assigned safety monitors to ride along during the early phase. Early reviews have been mixed: some riders praised the smooth handling and design, while others reported erratic driving behaviour, prompting further scrutiny from regulators.

Nonetheless, the launch marks a significant milestone. It transforms Tesla from an AV aspirant into an active participant in the robotaxi economy, and it signals the company’s intent to scale rapidly. Musk has publicly stated that the Robotaxi network could become Tesla’s most valuable business unit, potentially surpassing its core electric vehicle segment in profitability.

The economic opportunity in autonomous mobility is staggering. Analysts from ARK Invest have estimated that the global autonomous ride-hailing market could generate US$1 trillion in revenue per year by 2030, assuming widespread adoption. A more conservative analysis by Bloomberg forecast revenue of US$742 billion by 2039. A 2023 report by McKinsey estimates that AVs could contribute $300 billion to $400 billion in economic output annually by 2035 in the U.S. alone, driven by increased productivity, reduced accidents, and more efficient urban design.

This growth and revenue forecasts will likely shower AV winners with huge valuations. Waymo, currently seen as the category leader in safety and real-world deployments, could be valued at over US$100 billion if its ridership and city rollouts continue at the current pace. Tesla’s Robotaxi, embedded into the world’s largest EV fleet and with ambitious plans to expand beyond Austin, could generate upwards of US$30 billion in annual revenue by 2030 based on its existing customer base and future fleet projections.

Source: ARK Invest

Despite the hype, widespread AV deployment will likely remain gradual and uneven. Waymo has taken over a decade to scale up to just a handful of cities with truly driverless operations. Regulatory hurdles remain high, particularly in states with conservative transportation laws.

Meanwhile, Tesla, for all its ambition, still faces the challenge of proving that its vehicles are safe and reliable enough to operate without human oversight. The Austin launch is a critical test case, but it’s just the beginning. Expansion to other cities will require new permits, compliance with local laws, and continued progress in Full Self-Driving (FSD) software capabilities.

That said, the pace is clearly accelerating. In California, DMV permits for autonomous testing and deployment have more than doubled since 2020. Phoenix and Austin are emerging as AV-friendly hubs, with streamlined permitting and supportive city planning. Realistically, most analysts agree that between 2027 and 2030 will be the pivotal window where AVs transition from experimental to essential. Initial rollouts will be concentrated in urban centres with favourable regulation and high population density, before expanding to second-tier cities and eventually rural areas.

The AV race is not just about who builds the best tech; it’s about who can own the operating system of transport. Alphabet (GOOGL), through Waymo, and Tesla (TSLA) are positioning themselves as the iOS and Android of autonomous mobility. Investors should also watch emerging players like Cruise (owned by GM), Zoox (owned by Amazon), and Chinese competitors such as Baidu’s Apollo Go and AutoX, who are running parallel experiments in Shanghai and Shenzhen. Moreover, AV growth has implications for ancillary sectors such as semiconductors (NVIDIA), lidar (Luminar), smart infrastructure (ABB), and urban real estate planning are all likely beneficiaries of AV-driven disruption.

We are witnessing the early innings of what could be one of the most transformative shifts in transport history. Robotaxi’s launch in Austin signals a new phase, not just in tech deployment, but in public trust and regulatory acceptance. Meanwhile, Waymo’s mounting ride volume confirms that real-world AV services are scaling, and fast. If current momentum holds, autonomous vehicles will not just be part of the transportation landscape; they’ll redefine it. And for investors, governments, and innovators alike, the time to buckle up is now.

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