Alphabet Inc ’s (NASDAQ:GOOGL) Self-Driving Cars: Threat for Tesla Motors Inc (NASDAQ:TSLA)?

Waymo, the California-based autonomous cars company, which was spun-off by Alphabet Inc (NASDAQ:GOOGL) Google in 2014 as a standalone business, has announced that its Fiat Chrysler Automobiles NV (NYSE:FCAU) Pacifica minivans will be hitting roads by the end of January 2017. Waymo was part of Google’s X Labs projects, before the tech giant decided to make the ambitious startup a standalone business in December 2016. Nonetheless, Waymo works under the umbrella of Alphabet Inc (NASDAQ:GOOGL).

At the North American International Auto Show in Detroit, Waymo’s CEO John Krafcik said that his company made everything in the new self-driving cars by itself cameras, sensors, mapping technology, software and automated driver stacks.

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Tesla Motors Inc (NASDAQ:TSLA) and Alphabet Inc (NASDAQ:GOOGL) are up for tough competition in the self-driving car industry. While Alphabet spun-off Waymo, it still puts its effort, technology and money behind Waymo projects. There is a clear difference between the strategy and technology deployed by Tesla Motors Inc (NASDAQ:TSLA) and Google when it comes to self-driving cars. Tesla believes that adding sensors and cameras and making these devices smart enough to take control and avoid accidents is the way forward, while Alphabet relies on LiDar sensors. Alphabet regularly shares the number of miles covered by its self-driving cars, while Tesla shared an important data back in 2016, claiming that its self-driving fleet had covered over 47 million miles since its start in 2015. This figure dwarfs the total self-driven miles by Google’s cars. Tesla Motors Inc (NASDAQ:TSLA) has around 7000 cars equipped with “autopilot” mode while Alphabet’s Waymo has around 54 self-driving cars.

Google abandoned its plans of producing complete autonomous cars in December 2016.  Now, the company wants to focus on making hardware and software technologies for autonomous vehicles. Alphabet also has plans to team up with Fiat to start ride sharing services based on autonomous cars.

But Tesla Motors Inc (NASDAQ:TSLA) is a giant when it comes to self-driving cars and all things automobiles. With highly advanced technologies and heavy investments, Tesla has a clear edge in this battle of ambitions. Tesla’s most popular car, Model S, and Model X have several autopilot features and they are expected to receive incremental updates for self-driving technologies in the coming months. In December 2016, Morgan Stanley noted that Alphabet Inc’s (NASDAQ:GOOGL) decision to spin-off Waymo would bode well for Tesla, as Google is interested in diversifying the autonomous cars technology and give its tech to other companies as well, while Tesla has more ambitious, disruptive plan in the industry. Morgan Stanley’s analyst Adam Jonas thinks that companies mostly prefer to make and develop their own systems in the autonomous car industry. This will be a big negative for Alphabet Inc (NASDAQ:GOOGL) as the company wants to provide its hardware and software solutions to new entrants in the autonomous driving industry.