Autonomous ride-hailing service leader Waymo and Japanese carmaker Toyota have signed a preliminary agreement to explore the development of an autonomous vehicle platform as well as "personally owned vehicles." Google stock dipped on Wednesday.
Waymo, part of Google-parent Alphabet, announced the partnership in a blog late Tuesday. Meanwhile, Waymo last year revealed plans to expand in its first international market, Tokyo.
In the blog, Waymo said that in addition to developing a new autonomous vehicle platform, the companies will explore building next-generation personally owned vehicles (POVs). "The scope of the collaboration will continue to evolve through ongoing discussions," Waymo said.
Also, Waymo said it will "incorporate" Toyota vehicles into its ride-hailing fleet.
Waymo Business Model Evolving?
On Google's first quarter 2025 earnings call, Chief Executive CEO Sundar Pichai said Waymo's autonomous vehicles may be available for personal ownership at some point. There's "future optionality around personal ownership," he said.
Further, one question has been whether licensing its autonomous driving technology will be Waymo's main business model.
"This (Toyota deal) marks Waymo's first partnership and licensing of its leading autonomous technology into POVs," said Morgan Stanley analyst Brian Nowak in a report.
He added: "While much attention is paid to WaymoOne and the growing autonomous (ride hailing) fleet, Waymo has spoken about being open to licensing its technology for quite some time. This partnership highlights this opportunity and the potential for Waymo to act as the eventual 'autonomous mode software' behind a much larger fleet of cars in the near- and long-term."
Also, there's the question of when Waymo's progress will be priced into Google stock by Wall Street analysts.
Growing Autonomous Vehicle Competition
Waymo is scaling up fast as it faces growing competition from Elon Musk's Tesla, as well as Amazon.com's Zoox, Nuro and others.
The Waymo-Toyota partnership follows an announcement on April 24 by Uber Technologies and Germany's Volkswagen. The two companies announced a long-term strategic partnership to deploy thousands of electric, autonomous minivans in Uber markets.
In 2024, Waymo served over 4 million fully autonomous rides, providing 150,000 trips a week across Los Angeles, San Francisco and Phoenix. The company announced plans to expand to Austin and Atlanta this year and Miami in 2026. Robotaxi services in Austin started in early 2025.
On its Q1 earnings call with analysts, Alphabet disclosed that Waymo hit 250,000 paid robotaxi rides per week in the U.S., up from 200,000 in February.
Also in early 2025, Waymo said it would test its self-driving taxis in more than 10 new cities across the U.S., including Las Vegas and San Diego.
In addition, Waymo has been granted permission to map roadways near San Francisco Airport, opening up a potentially big market.
Meanwhile, Waymo has mainly operated in sunny cities with favorable weather conditions. At the recent Ride AI autonomous-vehicle conference, Waymo said it expects to launch in new bad-weather markets as well.
Google Stock Technical Ratings
On the stock market today, Google stock fell over 2% to 156.39 in morning trading amid a broad market sell-off.
Alphabet stock holds an IBD Composite Rating of 80 out of a best-possible 99, according to IBD Stock Checkup.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Google is among artificial intelligence stocks to watch.
Google stock holds an Accumulation/Distribution Rating of C. That institutional ownership rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
