Autonomous Vehicles Market Assessment, By Vehicle Type [Passenger Cars, Commercial Vehicles], By Levels [Level 0, Level 1, Level 2, Level 3, Level 4, Level 5], By Propulsion Type [Semi-Autonomous, Fully Autonomous], By Component [Camera Unit, LiDAR, Radar

Autonomous Vehicles Market Assessment, By Vehicle Type [Passenger Cars, Commercial Vehicles], By Levels [Level 0, Level 1, Level 2, Level 3, Level 4, Level 5], By Propulsion Type [Semi-Autonomous, Fully Autonomous], By Component [Camera Unit, LiDAR, Radar Sensor, Ultrasonic Sensor, Infrared Sensor], By Region, Opportunities and Forecast, 2017-2031F

Global autonomous vehicles market is projected to observe a CAGR of 23.47% during the forecast period 2024-2031, growing from USD 38.26 billion in 2023 to USD 206.65 billion in 2031. Growing awareness about road safety, increasing strict government regulations, rapid technological advancements in automotive technologies, and innovations in digital infrastructure are driving the growth of the global autonomous vehicles market. An autonomous vehicle uses different actuators, sensors, machine learning systems, compound algorithms, and powerful processors to implement software. These vehicles do not require human control and can go anywhere like traditional cars. In addition, these do not require a human passenger and can do everything that an experienced human driver does. Constant innovations in artificial intelligence, machine learning, and sensor technologies are propelling advancements in the digital features of these types of cars. These technologies enhance the overall safety of autonomous vehicles and function as an important component in enhancing the perception and decision-making of integrated systems.

Advancement in decision-making, perception, and overall system consistency aids in the growth of global autonomous vehicles market share.

In addition, autonomous vehicles offer independent mobility to the disabled person coupled with non-drivers. While traveling, they provide a high level of comfort and flexibility, propelling a demand for autonomous vehicles. Besides the advantages of autonomous vehicles, government initiatives to encourage hybrid and electric vehicle sales are also driving the growth of the global market for autonomous vehicles. Producers of autonomous vehicles are funding different research and development activities to advance the functioning and reliability of autonomous vehicles. Automakers are also collaborating and partnering with partners to expand their footprint globally and register the largest market share.

For instance, in March 2024, Volkswagenwerk G.m.b.H. announced its partnership with Mobileye Global Inc. for level 4 autonomous vehicles to focus on incorporating Mobileye’s self-driving system into Volkswagen’s future cars. This partnership also offers customers autonomous vehicles with cutting-edge technology, convenience, and safety.

Growing Demand for Shared Mobility and AI-Based Camera Systems Driving the Global Market

Self-driving cars and autonomous vehicles can function without humans or with little interference. Autonomous vehicles are designed to minimize accidents resulting from eased traffic congestion and human error, coupled with convenient transportation. Their development will speed up the expansion of ridesharing services. Autonomous vehicles are rapidly attaining traction in shared mobility. In addition, the benefits of AI camera systems include cost savings, the implementation of complementary technologies for reliable safety, and a highly compact form factor. Different companies are investing in compulsory sensors and AI-based camera systems to offer fully autonomous driving experiences to their customers.

For instance, in June 2023, Minus Zero Robotics Private Limited a Bengaluru-based AI start-up, revealed India’s first fully autonomous vehicle featuring a high-resolution camera-sensor suite. This vehicle can be run without human intervention in all driving conditions and environments and can capture real-time images of its surroundings.

Growing Requirement for Automated Energy-Efficient Vehicles to Promote Market Growth

One rapid trend in the market is the increasing adoption of fuel-efficient, emission-free, or energy-efficient automobiles. The strict emission regulations have compelled automakers to develop new-generation clean energy vehicles, comprising battery electric vehicles, fuel cell electric vehicles, and many more. Moreover, increasing fossil fuel prices owing to restricted availability propels demand for energy-efficient vehicles, including electric cars, as substitutes to traditional fossil fuel-powered vehicles. These vehicles are equipped with a high level of autonomy and innovative technologies to optimize energy consumption and deliver improved effectiveness through efficient driving. Hence, the rising demand for highly efficient clean energy autonomous vehicles globally propels the autonomous vehicle market growth. In addition, manufacturers are collaborating and investing to advance the features of autonomous vehicles and be competitive in the global market.

For instance, in October 2023, NEOM Company and Pony.ai, Inc. announced a joint venture to manufacture, develop, and deliver an autonomous driving service, energy-efficient autonomous vehicles, and smart vehicle infrastructure. This agreement contributes to building the world’s first truly sustainable, autonomous, shared, and integrated mobility system across the globe.

Government Regulations Support the Market Growth

Regulatory bodies in different countries are increasingly favoring autonomous vehicles owing to their potential to lower the increasing number of road accidents. Many state governments have invested in the development of autonomous car infrastructure. For instance, in May 2023, the U.S. Department of Transportation Federal Highway Administration awarded the University of Michigan a USD 9.8 million federal grant to encourage connected vehicle research. This project is seen as part of the federal government’s infrastructure initiative. In addition, automotive manufacturers comply with specifications and address safety standards set by different organizations, including the Insurance Institute for Highway Safety, the New Car Assessment Program, and the International Centre for Automotive Technology, to obtain vehicle authorization.

For instance, in 2024, the United States Department of Transportation initiated a USD 500 million grant program named Strengthening Mobility and Revolutionizing Transportation (SMART) to fund transportation technology projects. SMART will support initiatives comprising roadside sensors, autonomous vehicles, and aerial drones, aiming to invest in projects that bring transformative shifts in transportation.

Passenger Cars Segment Registers the Largest Market Share by Vehicle Type

The passenger car segment dominates the market growth due to the growing interest of consumers, increased disposable income, and the superior transportation mode. Autonomous vehicles are hands-free and stress-free transport, appealing to consumers looking for a relaxed and better driving experience. Steady advancements in technology, including AI algorithms, improved sensors, and connectivity, have made significant advancements in making passenger vehicles more handy and reliable. The passenger cars segment dominates the market as individuals choose private transport to avoid overcrowded public transport. There is an increase in demand for automated SUVs, and after the pandemic, the need to maintain social distancing has further increased the adoption rate of passenger cars. Moreover, the automakers are making significant innovations in autonomous driving to address the rising demand for autonomous passenger cars.

For instance, in October 2023, Tech Auto Private Limited announced a collaboration with Mobileye Global Inc. to achieve the objective of offering the pursuit of safe and reliable advanced driver-assistance systems (ADAS) and autonomous vehicle (AV) technology. This collaboration is also an important step towards offering safe software solutions in autonomous driving.

North America Registers the Largest Market Share

North America registers the highest market revenue share in the global autonomous vehicle market due to the region prioritizing the regulation of autonomous vehicle usage with precise demands. Governments are launching programs and delivering funding to confirm the safe deployment of autonomous vehicles. Different government initiatives, comprising funding and research and development programs for testing autonomous vehicles, are projected to propel market growth in North America. Increasing traffic congestion and fatalities, coupled with a public requirement for suitability, are fostering the requirement for safer and more efficient transportation choices in North America. Governments are enthusiastically developing guidelines to facilitate the testing and deployment of autonomous vehicles due to these challenges.

For instance, in March 2022, U.S. Transportation Secretary, Pete Buttigieg, announced that federal policy on autonomous vehicles would see ‘meaningful’ developments in the coming years.

Future Market Scenario (2024-2031F)

A significant amount of artificial intelligence programming in vehicle automation is driving the growth of the global autonomous vehicle market in the forecast period.

Innovations in advanced assistive driving systems are increasing demand for autonomous vehicles across the globe.

Increased technological innovations by OEMs for the advancement of autonomous vehicles is another key driving factor for market growth.

Increased energy savings and less environmental impact propelling the demand for autonomous vehicles.

Key Players Landscape and Outlook

Key players in the market provide a wide range of autonomous vehicles and services, aiming for consistent research and development to improve the technology. Their vehicles are equipped with proprietary autopilot systems, offering advanced driver assistance features and focusing on full self-driving capabilities. Furthermore, industry participants invest significantly in product development as autonomous vehicles require high-end electronic devices for advanced automotive features. Rapidly changing consumer preferences and rising awareness for environmentally friendly vehicles encourage market players to incorporate such features in their vehicles. These players often collaborate with electronic hardware manufacturing companies and other automakers to address rising consumer demand.

In June 2023, Tesla Inc. announced that this year Tesla self-driving cars will arrive. In this step, China is a major player in AI, and projected that China will become a leader in the field.

In April 2024, Waymo LLC announced that their self-driving cars are delivering Uber Eats (Uber Technologies, Inc.) orders for the very first time in the Phoenix metropolitan area.