Google's Waymo Leads Tesla in Robotaxi Race, Analyst Argues

Edgen Stock·Jan 24 2026, 14:03

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Key Takeaways

Ross Gerber, CEO of Gerber Kawasaki, argues that Google's Waymo is currently outmaneuvering Tesla in the race to develop a profitable robotaxi network. He contends that the eventual business model will rely on advertising revenue rather than fares, giving Google a structural advantage.

Cost Barrier: Current robotaxi services cost approximately three times more per mile than owning and operating a personal vehicle, a key hurdle to mass adoption.
Future Competition: As technology matures, the market is expected to face intense competition and a "race to the bottom" on fare pricing, diminishing profits from transportation itself.
Advertising is Key: Gerber predicts that long-term profitability will come from in-car advertising, positioning Google's ecosystem as the dominant force over transportation-focused rivals like Tesla and Uber.

Robotaxi Costs Remain 3x Higher Than Personal Ownership

In a January 24, 2026 analysis, Gerber Kawasaki CEO Ross Gerber declared that Google's Waymo holds a significant lead over Tesla in the autonomous vehicle sector. The primary obstacle hindering the industry's growth is cost. According to Gerber, operating a personal Tesla costs about $1 per mile, whereas current robotaxi services are estimated to be three times as expensive. This price disparity must be resolved before autonomous ride-sharing can achieve widespread consumer adoption and effectively compete with car ownership.

Advertising Model Positions Google for Long-Term Dominance

Looking forward, Gerber anticipates a highly competitive market with low barriers to entry, driven by the proliferation of NVIDIA-based autonomous systems over the next five years. This landscape will likely trigger a "race to the bottom" on fares, making it difficult to generate substantial profit from rides alone. Consequently, the business model will pivot from transportation to advertising. Gerber argues that future profits will be derived from ancillary revenues, such as showing YouTube videos and targeted ads to passengers. This strategic shift plays directly to Google's core strength as an advertising powerhouse, giving Waymo a decisive long-term advantage. Reflecting this conviction, Gerber noted that Google is a top investment in his fund.