Robo-Taxi Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Robo-Taxi Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Robo-taxi market was valued at USD 1.2 Billion in 2021 and is projected to grow to USD 28.11 Billion by 2027, registering a CAGR of 70% during the forecast period.

The COVID-19 pandemic had a massive impact on the market studied as lockdowns and trade restrictions have led to supply chain disruptions and a halt of vehicle production across the world. Due to the strict lockdown, several companies extended to launch Robo-taxi ride-hailing services. For instance, In 2020, Waymo postponed its ride-hailing services due to a lockdown. However, as restrictions eased, players started focusing on mitigating such risks and developments to create momentum in the market during the forecast period.

Over the medium term, the rise in the integration of advanced driver assistance in an autonomous vehicle is likely to witness major growth during the forecast period. Additionally, technological advancements in advanced driver assistance systems and a growing emphasis on multifunctional systems create lucrative opportunities for players to develop autonomous vehicles.

The growing issues of traffic congestion in major cities around the world, increase pollution and adversely impact health and overall quality of life. The demand for zero-emission vehicles or green vehicles is rising, also there is a surge in autonomous cars demand. Currently, three trends are accelerating transformative change in the automotive industry which are zero-emission vehicles, autonomous driving, and new mobility models. Autonomous, zero-emission Robo-taxis embody all three of these trends, offering the potential for convenient, personalized transport as an attractive alternative to owning a car or using public transport.

Robo-taxis are still in testing phases and carries the baggage of challenges which includes, high manufacturing cost, the risk of injury to drivers and pedestrians, lack of proper government regulations, and inadequate infrastructure for operating Robo-Taxis. These factors are likely to hinder the growth of the robot-taxi market.

However, Robo-taxis also provide an opportunity to significantly increase traffic capacity by reducing safe stopping distances between cars. As robots can react almost instantly, it is reasonable to reduce the enforced safe distance while still expecting higher safety levels.

Key Market TrendsRobo-Taxis Are Attracting People Around the World

Almost all vehicle manufacturers are testing and launching electric and autonomous vehicles around the world. The majority of the manufacturers are testing autonomous taxis for seeing the results and responses of people. Globally, people are welcoming the Robo-taxi concept based on which the technology and vehicle manufacturing companies have started working on it. Several Robo taxi service providers are launching their services across the globe. For instance,

• In September 2022, Cruise will launch commercial robotaxi services in Austin, Texas, and Phoenix by the end of the year 2022.
• In July 2022, Baidu launched a new Robo-taxi that comes with a detachable steering wheel. The company offers ride-hailing service for 50% less than other taxi fares.

The growth of electric mobility and autonomous cars is likely to create a positive outlook for the market. For instance, Passenger cars contributed to more than 70% of the global EV sales in 2021. The SUV segment in passenger cars has been witnessing growth for the past few years, owing to the demand not only from North America and Europe but also from Asia-Pacific (Especially China).

Consumers without cars would be likely to use autonomous vehicle-based mobility services to replace journeys by both conventional cars and public transport. Approximately 45% of people without regular access to cars are ready to use Robo-taxis instead of conventional public transport. Nearly 25% of people would use Robo-taxis instead of conventional taxis.

However, for car owners to switch to Robo-taxis, they would need to be convinced that Robo-taxis would at least match the experience in the key areas of independence, comfort, and convenience.

As soon as Robo-taxis are perceived as being more convenient than cars which they certainly have the potential to be then the demand for car-based mobility will increase.

Europe is Likely to Dominate the Robo-Taxi Market

The Robo-Taxi market is anticipated to be led by Europe followed by China and the United States respectively. European is the leading region that is providing advanced mobility technology and supportive infrastructure for the Robo-taxi market.

Majority of the fleet- operators who are working on Robo-taxi have found favorable business environments from all the perspectives such as regulatory frameworks that support environment-driven vehicle technologies in the region.

Several key players operating in the Europe region are launching new autonomous vehicles in the region. For instance,

• In August 2021, Motional and Hyundai Motor Group launched IONIQ 5-based robotaxi. IONIQ 5 is a Level 4 autonomous vehicle that can operate without a driver.
• In January 2022, General Motors Co. announced that it is planning to introduce a "personal autonomous vehicle" by mid-decade. It further stated that GM and Cruise are gaining significant technological expertise and experience and are working to be the fastest to market with a retail personal autonomous vehicle.

China is also rapidly working on the Robo-taxi concept. For Instance, Didi Chuxing, China’s leading taxi service providing company is developing autonomous driverless cars. Its technology partner is an electric car startup called CHJ Auto. Together they are working to create an all-electric robotaxi that can shuttle passengers around China's crowded megacities with no drivers at all.

• In July 2022, Baidu introduced a new self-driving taxi service Apollo Go in China.
• In April 2021, Toyota Motor Corp. unveiled in Japan new versions of the Lexus LS and Toyota Mirai, both equipped with Advanced Drive features a Level 2 autonomous system that helps keep the car in its lane, maintains the distance from other vehicles, and assists with lane changes and advanced-driver assistance and Toyota has also announced the purchase of Lyft’s autonomous car division for USD 550 million.

Competitive Landscape

The Robo-taxi Market is in a nascent stage due to the market has a limited number of players who are operating which includes NAVYA, Uber Technologies Inc., Waymo LLC, EasyMile, Didi Chuxing Technology Co., AB Volvo, Baidu Inc., and others.

The companies are testing Robo-taxis and making partnerships so that they can be ahead of the competition. For instance,

• In June 2022, Uber Technologies and Waymo LLC signed a long-term, strategic partnership to bring autonomous trucking solutions to market.
• In July 2021, Ford announced its plans of launching an autonomous vehicle fleet with Lyft and Argo AI. These companies further stated that they are planning to expand to Austin, Texas, by end of 2022 and roll out about 1,000 self-driving cars in multiple markets within five years.

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