Self-driving Cars – The Elevated Future of Mobility
The race for a completely self-driving car is underway with increased ongoing testing and prototyping of self-driving cars taking place worldwide, and autonomous systems consistently becoming more advanced. The automotive industry is almost on the brink of entering into a new mobility ecosystem that could provide faster, cleaner, safer, cheaper, more efficient, and customized travel. However, this is just the tip of the iceberg, as below the surface, a massive restructuring of the automotive industry is underway, wherein, self-driving car companies are emerging as the key element in the strategies for future mobility.
While uncertainty abounds, specifically about the pace of transition, a fundamental shift is highly likely to drive a move away from driver-controlled vehicles toward a future mobility ecosystem that is centered around self-driving cars. As more and more automakers are experimenting and inventing in this direction, and have passionate voices that describe much-altered futures, Transparency Market Research (TMR), in its latest business intelligence, analyzed the opportunistic future prospects of this industry.
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Technological Roadmap of the Self-driving Car Market
The first self-driving car was prototyped in the 1980s by the Carnegie Mellon University, and since then, automakers and research universities, as well as the IT industry, have become increasingly interested in self-driving car technologies. Google began its self-driving car project in 2009, and soon after, autonomous vehicle laws were passed in Nevada. In 2012, Google tested its driverless project with a self-driving car fleet, including 6 Toyota Prius, 3 Lexus RX, and an Audi TT; while Tesla begun the development of its fully-autonomous car in 2013. It was in 2016 that Tesla introduced fully-autonomous hardware in all its new cars, followed by autonomous vehicle guidelines by the U.S. Department of Transportation in the same year. The year 2018 marked the beginning of heavier investments in the self-driving car market, as Ford created a new AV division with plans to invest US$ 4 billion by 2023, and Uber ended its development of self-driving trucks to shift its focus on cars. The same year, the government of Japan announced plans to commence the testing of autonomous vehicles on public roads, with a vision to offer self-driving car services for the 2020 Tokyo Olympics. Since then, there has been no turning back for automakers in the self-driving car market. Though the self-driving car market is currently at a nascent stage, and gained US$ 20 Mn revenue in 2018, as per TMR, it holds high stakes of joining the mainstream in the years to come.
Impact of Undercurrents on the Self-driving Car Market
High Passenger Preference for Time-Saving Rides Unlocking Growth Prospects
Embedded with various sensors, including ultrasonic, LiDAR, RADAR, cameras, vision detectors, and GPS receivers, self-driving cars can drive closer together, and hold the potential to eliminate the probability of traffic congestion. This will create a parallel space for less traffic and reduced congestion, even with more cars on the road. The time-saving aspect of self-driving cars, as they allow passengers to utilize the time of the journey without any interference or menace of driving, is likely to fuel their adoption in the coming years.
Quest for Reliable Road Safety Solutions to Underpin Gains
Self-driving cars are coming out of laboratories and are undergoing test runs on the roads, and drawing increasing attention for their potential role in reducing fatal collisions. Self-driving car technology is increasingly shaping the current discussions of road safety. The International Organization for Road Accident Prevention estimates that, human error leads to ~ 90% of the road accidents, worldwide. For that matter, the adoption of self-driving cars can considerably reduce the number of road accidents, while making the streets safer by automating safety features and reducing dependency. This is a key determinant projected to propel the self-driving car market in the years to come. However, automakers still need to delve deeper into innovation to make self-driving cars widely adopted on a global scale.
Self-Driving Cars – Boon for People with Disabilities
The growing traction for better commuting sources for people with disability is anticipated to shape the adoption prospects of self-driving cars, as they could revolutionize how disabled people get around and travel even far from home. Visually-impaired people often face hurdles while travelling, and self-driving cars are poised to emerge as viable assistants to help them get around.
Favorable Regulations Underway
Reluctant regulatory bodies around the world are increasingly turning in favor of autonomous vehicles, in view of the potential role of self-driving cars in reducing the escalating number of road accidents taking place around the world. For instance, the Government of France is backing the development of self-driving cars with a vision to deploy ‘highly automated’ vehicles on public roads between 2020 and 2022. In 2019, the U.K. established a government department – the Centre for Connected and Autonomous Vehicles (CAV) – and has a legislation to allow testing on the motorways in the country, in the pipeline.
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Winning Strategies to Break Down the Barriers to Success
Symbiotic Collaborations for Cost Reduction
With automakers increasingly realizing the fact that the emergence of self-driving car technology will take longer than expected, they have placed focus on ways to reduce development costs and speed up schedules. Collaborations with automakers that are operating at different levels, and technology companies, are garnering center stage in the market, given the long-term commitment required to put self-driving cars on public roads. This falls in line with the fact that, the development costs of self-driving cars are high and the near-term returns are likely to be lower than expected.
Explore Opportunities in International Markets
Several companies in the self-driving car market are foraying into new regions where they have no existing operations or facilities, to expand their growth prospects and drive higher gains. For instance, U.S. auto supplier and autonomous software company, Aptivis, is opening an autonomous mobility center in China to emphasize development and subsequent deployment of its technology on public roads. Whereas, BMW and Tencent Holdings are collaborating to launch a computing center in China to develop self-driving cars in the world’s biggest auto market.
Foolproof Testing Before Launch
Unorganized cities are making ideal candidature for trials for companies that are conducting self-driving cars’ performance evaluation tests. Several automakers are carrying out trials in such complex and unorganized cities with an aim to obtain better data about erratic human behavior and test the abilities of their cars. For instance, Lexus is planning to carry out its first European testing of an autonomous car in Brussels. Previously, its mother company, Toyota, carried out such tests in the U.S. and Japan. Automakers are choosing cities with a large number of cyclists and pedestrians who are prone to behave unexpectedly, with an aim to prepare their self-driving cars for the number of challenges that don’t exist on motorways.
Competitive Landscape – Self-driving Car Market
- In 2019, Uber and Volvo joined hands to unveil the next-generation Volvo XC90 self-driving car, the first car fully autonomous self-driving car.
- In 2019, the U.K. established a government department – the Centre for Connected and Autonomous Vehicles (CAV) – and is working on legislations to allow testing on motorways in the country.
The self-driving car market is witnessing a very high degree of competition, with market forerunners taking stock of the shifting automotive ecosystem to determine players to collaborate or partner with, or acquire outright, to pace up the path to success in the industry. Market forerunners such as Waymo, Ford Motor Company, and Daimler AG are adopting product differentiation strategies and mergers & acquisitions to unlock higher gains in the self-driving car market.
Automakers are expanding their traditional manufacturing capabilities, and are collaborating with autonomous vehicle technology suppliers, software developers, and others to offer a wider range of product choices. A safe, sellable, autonomous car has become the holy grail of a large number of companies operating in the automotive industry. With automakers such as Renault-Nissan, Toyota, and Honda planning to launch self-driving cars by 2020, the market is highly likely to witness unprecedented growth in the years to come.
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Self-driving Car Market – Key Insights
- The global self-driving car market is anticipated to expand at a CAGR of ~ 89% between 2019 and 2030.
- The level 4 segment is expected to hold a dominant share of the self-driving car market during the forecast period. The level 4 segment is anticipated to hold ~ 90% share of the self-driving car market by 2030.
- The hybrid and fully-electric segments are anticipated to expand significantly, as stringent emission norms compel automakers to adopt electrification.
- Self-driving cars are expected to be introduced majorly by ride-hailing companies, and consequently, the on-demand service segment is estimated to account for a major share of the self-driving car market by 2025. Post 2025, self-driving cars are expected to be owned in mass by consumers for private transport.
Drivers of the Self-driving Car Market
Self-driving cars are expected to reduce the number of fatalities due to road accidents and improve vehicle safety, which is estimated to be a key factor that boosts the self-driving car market.
- Governments in countries such as the U.S., China, and Germany are legalizing and adopting policy framework to accelerate the adoption of self-driving cars.
- Shift in consumer mobility preferences toward ride-hailing, rather than vehicle ownership, has driven the adoption of innovative technologies such as autonomous driving in order to lower operating costs. Ride-hailing companies such as Uber Inc. and DiDi Chuxing are investing heavily and testing self-driving cars to provide autonomous taxi services.
- Self-driving cars are expected to reduce traffic congestion by interacting with other vehicles, and by detecting road blocks and devising detours accordingly. Self-driving cars are likely to allow valet parking, and provide accessible transport to senior and disabled riders.
- According to research conducted by the State Smart Transportation Initiative (SSTI), self-driving cars would improve highway capacity and improve travel speed by 20% due to their ability to better respond to driving scenarios, and efficiently accelerate and brake accordingly.
Challenges for the Self-driving Car Market
- Testing and commercialization of self-driving cars are still not legal in various countries around the world.
- Similarly, for self-driving cars to work, a universally accepted regulatory framework would be required. Currently, there are different regulations in different regions for the use of self-driving cars. Unclear laws and regulations associated with the use of fully autonomous cars are expected to restrain the self-driving car market.
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The global self-driving car market has been segmented based on level of autonomy, fuel, usage, hardware, and region.
Based on level of autonomy, the level 4 segment is expected to hold a major share of the self-driving car market. Automakers such as General Motors, Ford, and Honda have planned to launch level 4 autonomous car post 2020. Ride-hailing companies are testing level 4 self-driving cars. Companies such as WeRide, DiDi Chuxing, Waymo, and Uber are planning to launch mass autonomous taxi services in China and the U.S. by 2020.
Based on fuel, the hybrid segment is anticipated to expand significantly, owing to stringent emission norms to lower CO2 emissions. The hybrid and electric segments, cumulatively, are projected to hold a major share of the self-driving car market by 2030, due to a major shift in the automotive industry toward vehicle electrification.
In terms of usage, the on-demand service segment accounted for a notable share of the self-driving car market in 2018. Self-driving cars, being in the introductory phase, are currently used by ride-hailing companies, and hence, the on-demand service segment holds a major share.
Based on hardware, the global self-driving car market has been split into ultrasonic sensors, LiDAR, RADAR, cameras, vision detectors, GPS receivers, and others. The cameras segment accounted for a major share, in terms of volume, owing to the use of around 7 cameras in level 4 self-driving cars.
Global Self-driving Car Market: Regional Analysis
In terms of region, North America is expected to hold a major share of the global self-driving car market by 2030. Active participation from governments and positive consumer acceptance are anticipated to drive the self-driving car market in North America. North America is followed by Asia Pacific, in terms of market share, owing to the rising demand for self-driving cars in China.
Global Self-driving Car Market: Competitive Landscape
Key players operating in the global self-driving car market include
- Audi AG
- AB Volvo
- BMW AG
- Continental AG
- Apple Inc.
- Continental AG
- DiDi Chuxing
- Daimler AG
- General Motors
- Waymo LLC
- Ford Motor Company
- Honda Motor Co., Ltd
- Groupe PSA
- Nissan Motor Company
- Robert Bosch GmbH
- Toyota Motor Corporation
- Uber Technologies
- Tesla, Inc.
- Valeo SA
- Volkswagen AG.
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