Autonomous Cars Market Size, Share & COVID-19 Impact Analysis, By Type (Fully Autonomous and Semi-Autonomous), By Vehicle Type (Passenger Cars and Commercial Vehicles), and Regional Forecasts, 2021-2028

The global autonomous cars market size was USD 1.45 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with autonomous cars witnessing a negative impact on overall demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a huge decline of 20.3% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 1.64 billion in 2021 to USD 11.03 billion in 2028 at a CAGR of 31.3% in the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth rate, returning to pre-pandemic levels once the pandemic is over.

The autonomous vehicle is also known as a driverless car or self-driving car that can read and sense the environment and operate with minimal or no human input. Self-driving cars have become the major revolution in automation and connectivity technology. Computers, the internet, smartphones, and advanced technologies merge with vehicles to assist and automate driving operations.

Rapid improvement in sensor-processing technologies, high-definition mapping, adaptive algorithms, and the deployment of infrastructure-to-vehicle and vehicle-to-vehicle communication technologies are encouraging several companies to expand their production capacities and take vehicle automation to the next level. Increasing automated vehicle travel is likely to reduce vehicle operating costs, increase travel convenience and comfort, and encourage longer-distance commutes. Also, prominent players are contributing to the development of highly and fully automated cars and have announced their arrival by the end of this decade.

COVID-19 Pandemic has Accelerated Adoption of Autonomous Vehicles Worldwide

The pandemic-induced health concerns have significantly affected the mobility sector as more commuters opt for personal transportation. Moreover, changing shopping habits due to COVID-19 has also caused logistics and retail to adjust to the changing landscape owing to the increasing importance of e-commerce. These factors are strongly influencing the demand for these vehicles among businesses and consumers.

Several consumers, owing to lockdown measures and other related concerns, have switched to e-commerce. For instance, according to the Voice of the Industry COVID-19 survey conducted by Euromonitor International in 2020, 54% of the surveyed people indicated a plan to permanently increase online spending, and 28% plan to permanently reduce trips to physical stores.

Companies will need to increase operating capacity quickly to satisfy the increasing demand for delivery services and logistics. Therefore, autonomous cars are an attractive solution as they comply with social distancing measures, help to reduce costs, and increase delivery network capacity. During the first half of 2020, autonomous vehicles were used by several logistics companies in limited areas.

For instance, Nuro, an autonomous delivery company, received permission in California to operate its vehicles on public roads. Moreover, in the healthcare industry as well, autonomous vehicles are becoming a safe alternative. For instance, in Florida (U.S.), autonomous cars were used by the Mayo Clinic for the delivery of COVID-19 tests.

Moreover, booming e-commerce will accelerate the investments in autonomous technology in the logistics sector. According to DHL, a 40% reduction in transportation costs per km can be achieved owing to autonomous technology-induced time savings. These benefits can then be extended to consumers. Hence, these factors will influence the adoption of autonomous type of cars.

LATEST TRENDS

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Autonomous Ride-sharing Technology is a Positive Trend for Market Growth

Autonomous cars are one of the major innovations to arise in the automotive and transportation industry. Vehicle automation coupled with ride-hailing technology has induced several prominent players to invest high capital in the driverless ride-sharing market. By understanding the patterns of travelers, companies are focusing on improving safety, freeing consumers from the liability of private vehicle ownership, and adapting to the significant changes in the city infrastructure.

• For instance, autonomous taxis were introduced by Google spin-off Waymo initially on the streets of Arizona and Phoenix, and it has plans to expand to other areas on being successful. Also, major players such as Uber, Ford, and General Motors are likely to introduce similar services in the coming years.

DRIVING FACTORS

Stringent Norms and Increasing Government Support Pertaining to Vehicle Safety to Drive Growth

The commercialization of autonomous vehicle technology is expected to alter the transportation network across the world. The governments of several countries are initiating stringent safety norms and are promoting automation in vehicles to cater to the safety and security of vehicles, passengers, and pedestrians.

Moreover, automotive manufacturers are required to comply with the specifications and obtain the safety levels set by various organizations, such as the New Car Assessment Program (NCAP), the Institute of Highway Safety Insurance (IIHS), and the International Automobile Technology Center (ICAT) in order to access the authorization of vehicles.  Safety regulations include seat belt warning, electronic stability control, parking sensors, autonomous emergency brakes, and front-end airbags for drivers and co-driver.

In 2017, the Chinese Ministry of Industry and Information Technology (MIIT), along with the Government of China, announced their plan and drafted a bill to develop technological and innovative autonomous driving platforms for self-driving vehicles to become the world's leading player.

Widespread Adoption of ADAS to Boost Market Growth

Advanced driver assistance systems (ADAS) assist drivers through their artificial intelligence and other advanced features, thereby avoiding distractions and reducing the pressure on the driver. The rapid adoption of advanced technologies in software algorithms, sensors, cameras, processors, and mapping has improved the applicability of ADAS in vehicles. In addition, rising concerns of the safety and security of vehicles, occupants, and pedestrians and to reduce the rate of road fatalities, automotive manufacturers are incorporating ADAS in vehicles, thus fuelling the autonomous cars market growth.

RESTRAINING FACTORS

High Initial Cost & Risk of Malfunctioning May Restrain Growth

Autonomous car technology is a developing market in the communication technology and automotive industry. It provides several technologically advanced safety features, greater comfort, and security to the vehicles and their occupants. However, the in-vehicle services incur additional costs associated with the telecommunications services, connectivity solutions charges, and hardware systems which may limit the market growth. Also, these highly technological systems possess many challenges and complications such as malfunctioning and failures. In addition to that, the high risk of hackers accessing the system data and unauthorized access to the vehicle functions may hamper the market growth.

SEGMENTATION

By Type Analysis

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Semi-autonomous Car Segment to Dominate Backed by Rising Technological Development

Based on type, this market is segmented into semi-autonomous and fully autonomous. The semi-autonomous car segment accounts for the major share in the global market. The semi-automatic and self-driving car markets have been subdivided according to the degree of automation (at levels 1, 2, and 3, respectively). The level 2 and level 3 automation of the semi-autonomous segment of the market is expected to show the fastest growth. Currently, its adoption rate is moderate; however, due to the increasing technological development, its penetration rate is quite higher than level 1.

The semi-autonomous vehicle segment comprises various ADAS features such as intelligent park assist and adaptive cruise control, among others. Intelligent park assist and automatic emergency braking sub-segments are expected to show the fastest growth in the market owing to the government mandates regarding the implementation of driver assistance systems. According to National Highway Traffic Highway Safety Association (NHTSA), automatic emergency braking systems are expected to be a standard in vehicles by the end of 2022.     

By Vehicle Type Analysis

Passenger Car Segment to Hold Largest Share Owing to Rapid Urbanization

Based on the vehicle type, the market is segmented into passenger cars and commercial vehicles. The passenger car segment holds the maximum share of the global market. The increasing urbanization, high demographic growth, improved living standards, and rising purchasing power are the primary factors for the high growth of car production across the globe. Besides, the government and organizations of various regions are investing a high percentage in the development of technologically advanced features in vehicles. The rising demand for cars with enhanced safety features, comfort, and convenience is creating high traction for automated vehicles.

The commercial vehicle segment is also showing exponential growth in the market. The European Union (E.U.), in partnership with the Ensemble consortium and the Netherlands organization for applied scientific research, is planning to implement a multi-brand truck platooning on European highways to improve traffic capacity, fuel consumption, as well as reduce CO2 emission in Europe.   

REGIONAL INSIGHTS

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The market size in Asia Pacific stood at USD 0.72 billion in 2020. The region holds dominance in the global market owing to the increasing adoption of these vehicles and the growing consumer preferences for technologically advanced features. Automotive companies are planning to expand production units and achieve rapid technological advancement in manufacturing facilities in emerging countries, such as India and China.

• For instance, in 2017, Baidu announced an investment plan of USD 1500 million to boost the research and development activities for the development of autonomous cars over the next three years.

Additionally, the Government of China is vigorously working to achieve a competitive advantage in self-driving vehicle technology. Also, the governments of various countries are permitting self-driving car testing on public roads under certain norms and conditions.

Europe holds the second-largest autonomous cars market share due to the extensive investments by prominent manufacturers to develop advanced technologies. The British government is committed to installing self-driving cars on the roads by the end of 2021. It plans to make the necessary changes to the regulations to support the development of autonomous vehicles in the U.K.

KEY INDUSTRY PLAYERS

Robert Bosch GmbH is a Key Player Stoked by its Extensive Research & Development Activities

Robert Bosch GmbH is a global leader in the field of autonomous vehicle technology. The deployment of a wide range of advanced driver assistance solutions and the development of self-driving vehicles for the intelligent and safe era of mobility are the key visions of the company. Also, the constant R&D efforts by the company are leading to the creation of innovative technologies, which are some of the prominent factors responsible for the dominance of the company.

However, Waymo, Pony.ai, AutoX, and Baidu have also retained their positions in the competitive landscape. These companies significantly control the Asia-Pacific region. This is expected to affect the global market, as they are set to boost the technology innovation in this market during the forecast period.

LIST OF KEY COMPANIES PROFILED:

• Autoliv Inc.  (Stockholm, Sweden)


• Aptiv (Dublin, Ireland)


• Waymo LLC (California, United States)


• Robert Bosch GmbH (Gerlingen, Germany)


• Daimler AG (Stuttgart, Germany)


• Baidu (Beijing, China)


• AutoX, Inc. (California, United States)


• Pony.ai (Fremont, California, United States)


• Ford Motor Company (Michigan, United States)


• HYUNDAI MOTOR GROUP (Seoul, South Korea)


• Volvo (Gothenburg, Sweden)

KEY INDUSTRY DEVELOPMENTS:

• January 2021 – Cruise and General Motors (G.M.) Partner with Honda to Expand Autonomous Vehicle Mobility Service

Honda announced their collaboration with G.M. and Cruise on self-driving vehicles for its autonomous vehicle mobility service (MaaS) business in Japan, based on the development and commercial agreements signed in October 2018.

• July 2020 – Mobileye and Willer Announces their Partnership on Autonomous Mobility

Mobileye, an Intel Company, announces its partnership with Willer, a transportation service provider. The collaboration plans to launch a self-driving robo taxi service in Japan and the other parts of Southeast Asia.

• February 2020 – Pony.ai Announces to Raise $400 Million from Toyota to Develop Autonomous Driving

Pony.ai, an autonomous driving company, raises USD 400 million from Toyota Motor Corporation to expand their partnership in mobility services. The collaboration will develop autonomous driving technology, as well as deploy mobility services.

• August 2017 – Mobileye, Intel Corporation, BMW Group, and Fiat Chrysler Automobiles Signed MoU to Develop Autonomous Vehicles

Mobileye, Intel Corporation, BMW Group, and Fiat Chrysler Automobiles jointly signed a Memorandum of Understanding (MoU) to develop the world's leading platform for autonomous vehicle technology. The companies will support and leverage each other's resources, strengths, and capabilities to make this partnership successful across the globe.

REPORT COVERAGE

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The market report provides a detailed analysis of the market and focuses on key aspects such as the leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market over recent years.

Segmentation