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Alphabet Inc. (GOOGL) Waymo Spinoff Could Make or Mar Tesla Motors Inc. (TSLA)

Tesla Model 3 (TSLA)

Alphabet Inc Google self-driving unit has shown once again that it is doesn’t plan to become a rival to Tesla Motors Inc in the self-driving market. Breaking news holds that Alphabet has spun off its Google self-driving unit into a standalone bet under Alphabet’s umbrella.  Google’s self-driving unit is now a standalone firm called Waymo. Don’t take offense with Google’s penchant for poor naming choices, Waymo means “a new Way forward in Mobility.”

The Waymo spinoff suggests that Google is now about to pursue ways to monetize its self-driving tech after spending 7 years in R&D. John Krafcik, who left Hyundai to join Google is the CEO of Waymo. Krafcik is also working with Shaun Stewart who held executive position at TripAdvisor before joining Google.

Waymo is not a car company

Despite the fact that Alphabet Google was at the forefront of building self-driving cars, Waymo is not setting up shop as a car company. The firm notes that it is looking forward to licensing/selling its self-driving tech to automakers. The firm would also work with players in other industries such as ridesharing, trucking, logistics and public transport where self-driving tech could make a difference.

In Krafcik’s words, “We are a self driving technology company… We’ve been really clear that we’re not a car company although there’s been some confusion on that point. We’re not in the business of making better cars. We’re in the business of making better drivers.”

Waymo’s focus on software is similar to Apple’s recent move to scale down its Apple Car Project Titan to focus on car OS instead of building cars. However, Google and Apple’s move to scale down from hardware and to focus on software might make or mar Tesla Motors Inc Autopilot tech in the grand scheme of things.

Here’s how Waymo might hurt Tesla

Tesla might lose its near-monopoly of Level 5 self-driving tech if Waymo and Apple succeed in the plan to license self-driving tech to carmakers. In fact, Tesla’s Autopilot would be like the iPhone of cars on the one side because Musk controls both the hardware and software of the cars. On the other hand, Waymo will turn out to be the “Android” of self-driving cars because just about every carmaker will build a self-driving car on Waymo in the same way that any tech firm could build a smartphone on Android.

Alphabet Google Inc Waymo self driving car

Here’s How Waymo might help Tesla suceed

Tesla Motors Inc might succeed by building an exclusive, premium, and elitist self-driving car brand if Waymo licenses its self-driving tech to every carmaker that comes asking. Tesla’s tight control over hardware and software could make its car more appealing to buyers who want privacy and ads-free commute.

If the situation with Android OS on smartphone replays itself with “Waymo OS” for self-driving cars, you should be ready to endure ads on your commute (possibly on the windshield) among other evils that Google is not. More so, each of the carmakers that licenses Waymo’s self-driving tech will personalize the tech to look different from rival offerings. Hence, Waymo-powered self-driving cars are likely to become a confusing bunch in an attempt to be unique.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.