Autonomous Vehicles Market Size, Share, Forecast, & Trends Analysis by Type (Passenger Vehicles (Hatchback, Sedan, SUV, Others), Commercial Vehicles (Trucks, Buses)), Fuel Type (ICE, Electric), Level of Autonomy (L1, L2, L3, L4), Geography - Global Forecast to 2031

Autonomous Vehicles Market Size & Forecast

The Autonomous Vehicles Market is expected to reach $259.4 billion by 2031, at a CAGR of 20.4% from 2024 to 2031. The growth of this market is mainly driven by factors such as the increasing demand for luxury vehicles and the rising need to improve traffic flow and road safety. In addition, rising government initiatives for the development and adoption of autonomous vehicles, the development of ADAS technology, and the growing demand for semi-autonomous vehicles are expected to provide opportunities for market growth. However, the high cost of autonomous vehicles and the lack of required infrastructure in emerging countries can restrain the growth of the market. Data privacy and security concerns also pose challenges to market growth.

Autonomous Vehicles Market Growth Drivers

Increasing Demand for Luxury Vehicles

A luxury car is a car that provides above-average to high-end levels of comfort, features, and equipment. Often, more expensive materials and surface finishes are used, and buyers expect better build quality. Customers in the luxury car market worldwide are increasingly seeking high-end vehicles that offer both luxury and performance. They are looking for cars that provide a comfortable and prestigious driving experience, as well as the latest technological advancements. For instance, luxury car sales in India scaled a record high of 42,731 units in 2023, up 20% year-on-year. An increase in disposable income, the rise in purchasing power, and changing buyer preferences have boosted the adoption of luxury vehicles, thereby driving the growth of the autonomous vehicles market.

Rising Need to Improve Traffic Flow and Road Safety

Every year the lives of approximately 1.19 million people are cut short because of a road traffic crash, according to WHO (Switzerland). Between 20 and 50 million more people suffer non-fatal injuries, with many incurring a disability. Road traffic injuries cause considerable economic losses to individuals and their families.

Autonomous vehicles (AVs) have the potential to improve traffic flow and road safety. Human error is a leading cause of accidents, and AVs can minimize the risk by eliminating factors such as distracted driving, fatigue, and impaired driving. The sophisticated sensor systems of AVs can detect potential hazards more accurately and react faster than human drivers, reducing the number of accidents on the road.

In addition, traffic congestion is a worldwide challenge that poses significant economic, social, and environmental impacts. Countries worldwide, especially in urban areas, are confronted with the pressing challenge of managing traffic congestion. With advanced traffic management systems and real-time data analysis, AVs can optimize traffic flow and reduce congestion. Thus, all such factors are expected to drive the autonomous vehicles market growth.

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Autonomous Vehicles Market Challenge

Data Privacy and Security Concerns

Autonomous vehicles (AVs) are susceptible to cybersecurity threats. They are equipped with an array of sensors and advanced technologies that generate a vast amount of data as they navigate the roads. This data feed helps the vehicles analyze and make real-time decisions while building machine intelligence for future reference. However, this level of digitization of the vehicle’s operating system might open gates for cyber threats and raise concerns regarding privacy, security, real-time location data, and hacking of the vehicle’s system.

As the vehicles remain well connected through different modes, including the internet, cellular networks, and more, they are susceptible to cyber threats. A cyber-attack on an autonomous vehicle can lead to disabling or even crashing a vehicle, remote hacking, tampering with sensor data, and pose a significant threat to passenger safety and public well-being. Ensuring robust cybersecurity measures, including encryption, authentication protocols, and regular software updates, safeguards AVs from cyber threats.

Therefore, manufacturers aim to ensure the safety, security, and trustworthiness of autonomous driving technology by integrating security features into the design, adopting advanced technologies, and collaborating on industry-wide standards.

Autonomous Vehicles Market Trends

Increasing Demand of 5G Technology for Vehicle Connectivity

Autonomous vehicles are equipped with cutting-edge technology such as radars, lidars, cameras, and advanced computational capabilities. Vehicle-to-Everything (V2X) communication is integral to their functioning, and 5G is set to be a key enabler in this aspect. Through enhanced V2X communication, autonomous vehicles can interact seamlessly with other vehicles, pedestrians, road infrastructure, and even the broader network.

As the 5G network is becoming the prime technology to build driverless cars, the automobile sector would be one of the most exciting spaces to watch out for in the near future. 5G autonomous vehicles have been the top priority for car manufacturers and they are partnering with telecom operators to deploy significant technologies to give the best experience to users. For instance, in September 2020, Keolis (France) partnered with Urban ICT Arena (Sweden), Telia (Sweden), Ericsson (Sweden), Intel Corporation (U.S), and T-engineering (Sweden) to launch a new autonomous self-driving, electric minibus trial in Stockholm, Sweden, using 5G technology to remotely control and supervise the vehicle. This trial aims to explore the safe introduction of self-driving autonomous electric vehicles in complex urban areas with a view to optimizing route planning and traffic.

Autonomous Vehicles Market Opportunity

Rising Government Initiatives and Investment for the Development and Adoption of Autonomous Vehicles

Autonomous vehicles (AVs) have the potential to change transportation and make lives better by enhancing mobility and road safety. Governments across the globe are recognizing the potential of autonomous vehicles and are taking several steps to encourage development. Various countries have implemented transportation strategies. For instance, the Dubai Autonomous Transportation Strategy: This strategy aims to have 25% of all transportation in Dubai to be autonomous by 2030. This strategy aims to introduce autonomous vehicles across different modes of transportation, including taxis and buses.

Furthermore, rising government investment in self-driving technologies is expected to support market growth. For instance, in September 2023, the Centre for Connected and Autonomous Vehicles (CCAV) U.K. is providing $23.01 (GBP 18.5) million to fund 13 different projects focusing on self-driving technologies, products, and services. The money is part of a $62.19 (GBP 50) million government drive to boost green technology innovation and the economy and to create more jobs.

Autonomous Vehicles Market Analysis: Key Findings

By Type: In 2024, the Passenger Vehicles Segment to Dominate the Autonomous Vehicles Market

Based on type, the autonomous vehicles market is broadly segmented into passenger vehicles and commercial vehicles. In 2024, the passenger vehicles segment is expected to account for the larger share of ~86.0% of the global autonomous vehicles market. The large share of this segment is attributed to the increasing demand for automated energy-efficient vehicles, technological advancement in self-driving cars, rising government focus on adoption of autonomous vehicles, and rising focus of manufacturers on product development. For instance, in April 2021, Toyota Motor Corporation (Japan) unveiled new versions of the Lexus LS and Toyota Mirai equipped with Advanced Drive, the company’s advanced driver assist system in Japan. Advanced Drive features a level 2 autonomous system.

However, the commercial vehicles segment is expected to register the highest CAGR during the forecast period. Factors such as growing focus on automation and electrification of public transport, rising investment in connected infrastructure, and rising focus of manufacturers on the development of autonomous commercial vehicles are expected to drive the segment growth. For instance, in April 2023, Continental AG (Germany) partnered with Aurora Innovation, Inc. (U.S.) to deliver the first commercially scalable generation of Aurora’s flagship integrated hardware and software system, the Aurora Driver. The organizations will jointly design, develop, validate, deliver, and service the scalable autonomous system for the trucking industry.

By Fuel Type: In 2024, the Electric Segment to Dominate the Autonomous Vehicles Market

Based on fuel type, the autonomous vehicles market is segmented into ICE and electric. In 2024, the electric segment is expected to account for the larger share of the global autonomous vehicles market. The large share of the segment is attributed to the rising adoption of battery-powered, energy-efficient vehicles and the rising focus on reducing greenhouse gas emissions.

Moreover, the electric segment is also expected to register the highest CAGR during the forecast period. The growth of the segment is attributed to the rising focus of autonomous vehicle manufacturers on product development and enhancement. For instance, in September 2023, BMW AG (Germany) selected Amazon cloud technology to build its autonomous driving features for new EVs.

By Level of Autonomy In 2024, the Level 2 Segment to Dominate the Autonomous Vehicles Market

Based on level of autonomy, the autonomous vehicles market is segmented into level 1, level 2, level 3, and level 4. In 2024, the level 2 segment is expected to account for the largest share of ~74.0% of the global autonomous vehicles market. The large share of the segment is attributed to the continual assistance offered by level 2 vehicles in acceleration/braking and steering, the rising need to enhance the safety and comfort of passengers, and ongoing development in level 2 autonomous vehicles. For instance, in April 2023, Ford Motor Company (U.S.) launched a level 2 autonomous hands-free driver assistance system called Ford BlueCruise, which it says is the first to receive regulatory approval for use on a public highway in Europe. However, the level 4 segment is expected to register the highest CAGR during the forecast period. Ongoing research and development on level 4 autonomous vehicles is expected to drive the segment growth in the forecast period.

Geographical Analysis

In 2024, North America is expected to account for the largest share of ~36.0% of the autonomous vehicles market. The large share of the North American region is attributed to the rising government support for autonomous vehicle research, testing, and development, the growing need for safe and efficient driving options, the rising adoption of self-driving technology, and the growing focus of manufacturers on autonomous vehicle development. For instance, New Flyer of America Inc. (“New Flyer”), a subsidiary of NFI Group Inc. (“NFI”), one of the world’s leading independent global bus manufacturers, unveiled its Xcelsior AV™ automated transit bus, now in motion at Robotic Research, LLC (“Robotic Research”) in Maryland.

However, Asia-Pacific is expected to register the highest CAGR of ~22% during the forecast period. The growth of this region is attributed to the rising government initiatives to promote the development and adoption of autonomous vehicles and the increasing need to address congestion, improve mobility, and enhance transportation efficiency. For instance, in February 2024, according to the Infocomm Media Development Authority (IMDA), Singapore is looking to boost its national broadband network to better prepare for emerging technologies, such as artificial intelligence (AI) and autonomous vehicles. The country will set aside up to $74.2 (SG$100) million) to upgrade the current nationwide network to deliver speeds of up to 10Gbps.

Autonomous Vehicles Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies adopted in the last 3–4 years. Some of the key players operating in the autonomous vehicles market are General Motors Company (U.S.), BMW AG (Germany), Daimler Truck AG. (Germany), Mercedes-Benz AG (Germany), Hyundai Motor Company (South Korea), Tesla, Inc (U.S.), Renault Group (France), Toyota Motor Corporation (Japan), Volkswagen Group (Germany), Ford Motor Company (U.S.) and AB Volvo (Sweden).

Autonomous Vehicles Industry Overview: Latest Developments from Key Industry Players

• In December 2023, Kodiak Robotics, Inc. (U.S.), a leading self-driving technology developer for the trucking and defense markets, unveiled its first autonomous test vehicle designed specifically for the U.S. Department of Defense (DoD). This vehicle is a Ford F-150 up-fitted with Kodiak's autonomous system, the Kodiak Driver, and contains both the autonomy hardware and software required to operate a military ground vehicle.

• In January 2023, Mercedes-Benz AG (Germany)announced that it is the world’s first automotive company to bring SAE Level 3 conditionally automated driving to the U.S., with Nevada being the first state to confirm the compliance of the system with state regulations.

• In July 2022, Hyundai Motor India launched an all-new version of its range-topping SUV Tucson with level 2 ADAS capability. The new fourth-generation Tucson is equipped with six—and eight-speed automatic transmissions and petrol and diesel powertrains.

Autonomous Vehicles Market Research Summary:

Key questions answered in the autonomous vehicles market report: