Rival Shows the Drawback in Tesla's Driverless Tech Strategy. Are They Right?

Adam Jonas of Morgan Stanley has valued Tesla using a sum-of-the-parts model, highlighting that autonomous driving technology and the robotaxi business account for 41% of the company's valuation. In contrast, Tesla's core automotive and energy business make up 34%, while the potential of the Optimus robot represents 25%. Consequently, when rival Waymo of Alphabet, which owns both Google (NASDAQ: GOOG) and Alphabet (NASDAQ: GOOGL), points out potential drawbacks in Tesla's driverless technology strategy, investors should take notice.

Recently, Waymo's co-chief executive officer, Dmitri Dolgov, seemingly took aim at Tesla during a speech at Y Combinator's Startup School. While he didn't specifically mention Tesla by name, Dolgov argued that camera-only self-driving technology could be deemed "weak sensing." He further suggested that this strategy might initially develop rapidly but would eventually face limitations, ultimately reaching a lower ceiling of capability and performance in the long term.