Why Google Is Tesla's Biggest Competitor

Should Tesla Inc TSLA's investors be worried about the automaker's newest competitor, Alphabet Inc GOOG GOOGL? According to Morgan Stanley's Adam Jonas, there is reason to be concerned.

Jonas commented in a report that Alphabet's autonomous driving unit, Waymo, could be valued at $70 billion in the not too distant future.

The analyst is bullish on the unit after it struck a partnership with Lyft, which brings together Waymo's technical expertise with Lyft's platform that could offer hundreds of millions of miles of testing.

Everyone Is Getting Into The Space

Jonas' note was dissected by CNBC's "Halftime Report" crew. The team noted that the autonomous driving space is becoming more crowded which begs the question is the space overcrowded with too many giants competing against each other.

The CNBC hosts also expressed concern with Tesla's stock valuation which they believe is based on "how much money it's going to make." The problem is that the overcrowded space makes it more difficult for the company to, at the very least, match what investors are expected.

Analyst: A Lot Of Room For Everyone

Rob Sechan of UBS Private Wealth Management was a guest on the segment and jumped in with his take.

According to Sechan, one of the key factors moving forward is consumer habits.

As is typically the case, consumers can switch loyalty from one brand to another which implies there is enough space in the segment for multiple players if the "adoption is broad based."

See Also:

Where The Lyft-Waymo Deal Steers Ride-Hailing

Assessing The Threat Waymo And Lyft Pose To Tesla