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The global robotaxi market size was USD 0.40 billion in 2019. The global impact of COVID-19 pandemic has been unprecedented and staggering, with robotaxi witnessing a positive demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a stellar growth rate of 24.3% in 2020. The market is projected to grow from USD 0.50 billion in 2020 to USD 11.10 billion in 2027 at a CAGR of 61.2% during the 2020-2027 period.
Robot taxis are self-driving taxis and cars operated by on-demand and ride-sharing travel services, with zero human interference. The risk of collision is almost zero as there is no human error caused while riding. These self-driving taxis are equipped with various cameras, RADAR, LiDAR, and other smooth operation sensors. Furthermore, they are connected to a smartphone or tablet and have internet access, optimizing their operation regularly.
The car can share content with a range of devices inside and outside the vehicle environment through various network connections that aid in avoiding collisions, reducing fatalities, and enabling vehicle management more efficiently. In recent years, most manufacturers are focusing on producing autonomous vehicles that are likely to fuel market growth.
Closure of Manufacturing Facilities Due to COVID-19 to Hamper Market Growth
China is a major contributor to the automotive industry's development and an important distributor of various vehicle parts and technologies. Many countries have been affected by strict restrictions on cross-border trade. Amid the global pandemic, the automobile industry has been severely affected and is facing several challenges. The automotive industry is an important part of the global economy that accounted for approximately 16% of the global GDP in 2018.
Many manufacturing plants have been closed worldwide. In Europe, various car companies have been temporarily closed to minimize losses. For example, during the coronavirus pandemic, Volkswagen and Daimler announced the temporary closure of their production plants in Europe.
However, to overcome the economic crisis, governments worldwide are introducing various programs to encourage manufacturing industries. For instance, in 2014, the Government of India launched the ‘Make in India’ initiative to encourage foreign manufacturing companies to establish manufacturing units in India. The government further offers various benefits such as lower taxes, subsidies in return.
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Increasing Demand for Energy-Efficient Vehicles to Favor Growth
The growing adoption of fuel-efficient and emission-free vehicles is a major trend witnessed in the global robo-taxi market. The increasing imposition of stringent emission norms has enabled manufacturers to develop fuel-cell-based and electric vehicles. Robo taxi is fully autonomous and thereby needs an efficient and advanced fuel system to run the vehicle. The increasing adoption of such vehicles is expected to reduce congestion on roads leading to better air quality and reduced emissions. For example, on January 18th, 2021, Hyundai revealed they are in talks with Apple to reduce high manufacturing costs in developing Apple’s Autonomous car.
Increasing Focus on Road Safety to Propel Market Growth
Self-driving taxis have several advantages over conventional vehicles as they are equipped with advanced LiDAR, RADAR, sensors, and cameras for their operation. The technologically advanced short and long-range sensors help detect obstacles around the vehicles and reduce the rate of road accidents. These vehicles also help to reduce traffic congestion while running on the road. For example, according to the study of the University of Illinois, if one is stuck in a traffic jam with around 20 vehicles driven by humans, the robo taxi controls its speed and detects vehicles around it and moves at a constant speed in a single lane, and help to reduce the congestion on the road.
Increasing Adoption of Advanced Driver Assistance System (ADAS) to Fuel Market Growth
The increasing implementation of advanced driver assistance systems (ADAS) in an autonomous vehicle is expected to drive the robotaxi market growth during the forecast period. Advanced ultrasonic sensors, cameras, and software are widely used in road obstacle mapping systems. This helps to improve the applicability of ADAS in all vehicle segments.
Owing to the increasing concerns about passenger safety, governments in developing countries have imposed strict safety regulations on automakers to develop vehicles equipped with ADAS functions. According to the road safety report released by the World Health Organization in 2018, the global road death toll reached 1.35 million.
On 14th September 2018, the Union Ministry of India announced that the Indian government is focused on making road transportation safer by implementing ADAS features in all vehicle segments by 2022. According to the Ministry, electronic stability control and blind-spot detection systems will be mandatory across all vehicle segments by 2022.
High Research and Development Cost to Restrain Growth
A robotaxi consists of more than 40 sensors such as RADAR, cameras, and LiDAR that help in the vehicle's efficient functioning. These advanced sensors are expensive, and their work depends on the type of hardware and software used during operational activities. Automotive LiDAR can cost up to USD 50,000, which adds up to the cost of the vehicle. Additionally, level-4 and level-5 autonomous vehicles are unavailable for analyzing and testing as these vehicles are in the development phase.
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Passenger Segment to Dominate the Market
Based on application type, the market is segmented into passengers and goods.
The passenger segment is anticipated to dominate the market during the forecast period. Conventional taxis are more prone to road accidents than autonomous passenger taxis and are major sources of air pollution. Moreover, autonomous passenger taxis reduce travel costs from one destination to another, leading to significant fuel and driver costs. In recent years, various automobile companies have introduced innovative products to improve the convenience of public transportation. These factors are expected to contribute to the growth of the segment in the forthcoming years.
For instance, on 23rd November 2020, the California Public Utilities Commission (CPUC) announced the launch of their own two new driverless vehicle programs (the Driverless Autonomous Vehicle Deployment Program and the Driver Autonomous Vehicle Deployment Program) in the state. These programs allow the user to offer ride-sharing services and accept monetary compensation for self-driving cars and passenger services.
The goods segment is anticipated to show decent growth during the forecast period as most automobile companies are investing in robotaxis. The robotic assistance provided by self-driving cars to small businesses for goods transportation, replenishment, and other daily tasks is expected to be one of the main adoption factors of robotic taxis.
Electric Vehicle Segment to Hold the Largest Market Share
Based on the propulsion type, the robotaxi market is segmented into electric vehicles, hybrid vehicles, and fuel cell systems.
The electric vehicle segment is expected to dominate the market during the forecast period. Electric vehicles have gained popularity owing to their several advantages over conventional vehicles such as zero-emission, low maintenance, and high efficiency. Key OEMs across the globe have partnered with various players to develop advanced infrastructure for charging electric & hybrid electric vehicles, which will boost the market over the forecast period. For example, on 9th November 2020, Tesla announced to set up around 20000 charging stations across the United States.
The fuel cell segment is expected to show slow growth in the market. In recent years, there has been an increased demand for fuel cells as they provide high efficiency, less noise, and low maintenance than gasoline and diesel.
LiDAR Segment to Lead Market Share
The LiDAR segment is expected to be the fastest-growing segment during the forecast period. LiDAR is one of the vital components in the robotaxis and is used to reflect pulse light to calculate the distance between two cars. When integrated with advanced sensors, it helps to measure reflected pulsed light and work more precisely. When compared to RADAR, LiDAR can scan the road surface a hundred times within seconds. This scanned information is sent to the vehicle’s smart computer and automatically adjusts vehicle speed.
The sensor segment is expected to hold the second-largest position in the market. A vehicle is equipped with more than 50 sensors to detect the seen and unseen obstacles around the vehicles efficiently. Technologically advanced sensors are equipped in different vehicle parts that enhance the advanced driver assistance system (ADAS), one of the crucial features of autonomous vehicles.
Asia Pacific Robotaxi Market Size, 2019 (USD Billion)
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Based on the region, the market is segmented into North America, Europe, Asia Pacific, and the Rest of the World.
Asia Pacific stood at USD 0.14 billion in 2019 and is expected to dominate the global robo-taxi market in the forthcoming years. This is due to the increasing adoption of high-end technologies. Key emerging countries such as India, South Korea, and China are major markets for automotive and technologically advanced components. Factors such as the rising number of road accidents, increasing disposable income of consumers, and growing traffic congestion are the major reason for the adoption of autonomous vehicles in the region. Moreover, supportive government initiatives are boosting the demand for the product. For example, in February 2020, the Chinese government presented a blueprint for developing autonomous vehicles by 2025.
North America is expected to be the second-largest region in the market owing to the numerous development projects undertaken by the government across the region. Additionally, the presence of major key players is expected to propel the market's growth in the forthcoming years. The growing partnerships and collaborations among key market players have led to the early adoption of advanced technologies. For example, in December 2020, Motional and Lyft, Inc. announced to launch the robotaxi service in multiple cities in the U.S by 2023.
Europe is expected to show steady growth in the market during the forecast period. Stringent safety norms in Europe are the main reason for the steady growth of the market in the forthcoming years.
Tesla Inc. to Develop Several Charging Infrastructure to Strengthen its Market Position
Tesla Inc. is a major player in the global robo taxi market. The company is focusing on deploying a wide range of advanced batteries and electric cars. Moreover, it is developing self-driving vehicles for intelligent transportation and safe goods. Also, the constant R&D effort by the company is leading to the development of innovative technologies, which are some of the prominent factors responsible for the dominance of the company.
An Infographic Representation of Robo Taxi Market
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The market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading product applications. Besides this, the report offers insights into the current market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market's growth over recent years.
Value (USD Billion)
By Application Type
By Component Type
By Propulsion Type
Fortune Business Insights says that the global market size was USD 0.40 billion in 2019 and is projected to reach USD 11.10 billion by 2027.
In 2019, Asia Pacific stood at USD 0.14 billion.
The market is projected to grow at a CAGR of 61.2% and will exhibit exceptional growth during the forecast period (2020-2027).
The propulsion type segment is expected to be the leading segment in this market during the forecast period.
The increasing adoption of advanced driver assistance systems is driving the global market.
Tesla is the leading player in the global market.
Asia Pacific dominated the market share in 2019.
The rising inclination towards emission-free and fuel-efficient vehicles is expected to drive the adoption of autonomous vehicles.
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