An Amazon-owned company that develops custom autonomous vehicles said it would expand to two new cities as it races to gain a slice of a highly contested market.
Zoox on Monday announced it would begin testing its robotaxi vehicles in Phoenix and Dallas. To start with, the company will deploy a small fleet of retrofitted Toyota (JP:7203) Highlander SUVs with human safety drivers. Later, the SUVs will be replaced by Zoox's custom toaster-shaped vehicles.
"These markets allow us to rigorously validate our technology's resilience in diverse and challenging weather conditions," Zoox wrote in a blog post.
Zoox was acquired by Amazon (AMZN) for more than $1 billion in 2020. Two years earlier, the company was valued at $3.2 billion, according to Bloomberg News.
The acquisition opened Amazon up to a global market worth as much as $200 billion by the end of the decade, according to a bullish August 2025 forecast from Morgan Stanley analysts. The bank has projected that by 2050, 98% of all cars sold could be autonomous vehicles.
Zoox is testing its vehicles in 10 markets and offers free public rides in Las Vegas as well as San Francisco. Its fleet has driven more than 1 million autonomous miles and served more than 300,000 customers, according to the company.
However, Zoox is still far behind Waymo, the market leader backed by Alphabet $(GOOG)$( GOOGL), which offers public rides in 10 U.S. cities and is looking at another 19 for expansion. It recently said its fleet had collectively driven 200 million fully autonomous miles.
"We are on track to serve over one million rides per week by the end of this year," Waymo co-CEO Tekedra Mawakana said in a statement last month.
Tesla $(TSLA)$, like Zoox, is playing catch-up. The company offers a mix of human-supervised and fully autonomous trips in Austin, Texas, while its ride-hailing service in San Francisco requires a safety monitor for all rides.
Tesla CEO Elon Musk said recently that his company will aim to deploy a robotaxi service in seven additional cities by June, with targets in Texas, Florida, Arizona and Nevada. BofA analyst Alexander Perry said in a recent note to investors that Tesla's robotaxi business is the most valuable part of the company, surpassing its core electric-vehicle division.
Another robotaxi rival, Uber Technologies (UBER), works with Waymo in Atlanta and Austin, as well as Avride in Dallas and Volkswagen (XE:VOW3) in Los Angeles. Uber has also teamed up with May Mobility, Nuro and Lucid $(LCID)$.