BMO Capital’s AV Specialist: Tesla is “Substantially Behind” Waymo in Autonomous Vehicle Technology

This article does not constitute investment advice. The author does not hold any shares in the stocks referenced.

Tesla has been actively promoting its newly launched robotaxis, creating a buzz through a select group of influencers who were given early access to the service. Their enthusiastic reviews have contributed to bolstering Tesla’s stock price. However, the reality of Tesla’s position in the self-driving vehicle market is more complex, straddling the line between optimistic projections from within the company and the critical assessments offered by skeptics.

Critical Perspectives from BMO Capital on Tesla’s Robotaxis

Recently, an expert from BMO Capital, specializing in Autonomous Vehicles (AV), provided a critical analysis of Tesla’s robotaxi service performance. Having previously worked with Waymo and now advising government entities on AV advancements, this expert voiced concerns about Tesla’s standing in the competitive landscape of autonomous driving technologies.

BMO Capital’s AV Expert: ‘Waymo Is Miles Ahead’

We hosted an autonomous vehicle (AV) expert who previously worked at Waymo and now collaborates with policymakers to advance the AV industry. Our expert suggested that the industry is in the early innings of its commercialization…

— Kaushik (@BigBullCap) June 26, 2025

In a recent note, BMO Capital highlighted that, despite acknowledging the industry’s nascent stage of commercialization, the expert claimed that Waymo remains “miles ahead”of its competitors, including Chinese firms like Baidu and Pony.ai, as well as Amazon’s Zoox and May Mobility. Tesla, the expert asserted, is currently “significantly behind”Waymo in this increasingly competitive arena.

The expert detailed that a typical driver in a ride-sharing scenario averages between 15 and 20 rides per day, while Waymo reportedly achieves between 20 to 25. For Waymo to maximize economies of scale, it would need to ramp up to 50 rides per day per vehicle. Currently, Waymo operates an autonomous ride-hailing service in five cities with a fleet of approximately 1, 500 Jaguar I-Pace vehicles, each equipped with advanced technology including LiDAR, 360-degree cameras, and radar systems.

In contrast, Tesla utilizes a sophisticated neural network with cameras touted to discern individual photons, although some industry experts are skeptical about this capability. BMO’s AV expert acknowledged that while LiDAR systems are cost-prohibitive, they offer crucial depth perception. Should Tesla’s camera-focused approach prove as effective, it could give the company a significant edge over its competitors.

Initial Challenges for Tesla’s Robotaxi Service

After only 4 days, Tesla’s robotaxi service in Austin has already logged one incident of “Safety Concern”, giving it a rate of 0.25/day so far.

Waymo has 22 Safety Concern incidents since testing began 359 days ago (0.06/day) & 14 since service began in March (0.12/day).$TSLA pic.twitter.com/LryAHvLToX

— Motorhead (@BradMunchen) June 26, 2025

Notably, the National Highway Traffic Safety Administration (NHTSA) has reached out to Tesla following reports of various traffic violations committed by its robotaxis. Issues included improper lane changes and exceeding speed limits.

To provide some perspective, it’s worth mentioning that Waymo, which has logged more than 10 million miles with only 22 critical incidents, operates a smaller fleet of 11 robotaxis in a geofenced area of Austin. Each vehicle is supported by safety operators to intervene if necessary. In comparison, despite the excitement around Tesla’s Full Self-Driving (FSD) technology, it remains classified as a Level 2 autonomous system, while Waymo is recognized as Level 4.

Positive Outlook from Benchmark for Tesla

Despite the challenges facing Tesla, not all assessments are negative. Benchmark has raised its target price for Tesla shares from $350 to $475, highlighting the company’s “controlled and safety-first approach”as a potential catalyst for accelerating regulatory approvals for its robotaxi services.

Benchmark further commented:

“We are a believer in TSLA’s camera-focused approach that is not only cost effective but also scalable.”

It’s important to note that Tesla has experienced a decline in stock price recently, erasing gains made earlier in the week and currently trading flat over the past five days; it has also fallen approximately 10% over the past month.

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