An autonomous vehicle operates through a programmed system that doesn’t require a driver. Its core technology utilizes ADAS, which stands for Advanced Driver Assistance System and helps control complex driving processes. Sometimes referred together with 5G technology, the autonomous vehicle stands at the heart of the 4th Industrial Revolution that aims to solve social issues such as traffic congestion and car accidents. Global market research agency IHS Market predicts that by 2040, 25% of new cars will be autonomous vehicles.
According to Allied Market Research, the global industry market size for autonomous vehicles is expected to reach $53.23 billion in 2019 with a CAGR of 39.47% from 2019 to 2026. Factors that help accelerate the growth of this industry include better traffic systems, connected infrastructures, supportive government regulations, and transition of ownership to mobility-as-a-service (Maas). However, high manufacturing costs and data management challenges have also halted this growth of this industry in many ways.
Key Facts
- 47% of Americans feel that driverless vehicles are not safe.
- There are currently no self-driving cars operating on US roads that are completely autonomous.
- 76% of Americans want Congress to install brakes in driverless cars.
- Two pedestrian fatalities have been caused by one Uber vehicle and One Tesla AV.
- By 2023, the US streets will have about 4.5 million autonomous vehicles on the road.
- The global market value for driverless car industry is expected to reach $1 trillion by 2025.
- 55% of small business owners believe their motor fleets will be completely autonomous in 20 years.
What’s Ahead
Autonomous vehicles have gained tremendous traction in recent years. Studies show that one in four smartphone users prefer having autonomous vehicles over traditional ones. In addition, major cities across the U.S. are taking active steps to prepare for the arrival of these vehicles. According to the Autonomous Vehicle Pilots Across America, over 50% of U.S. cities are working to better manage transportation systems through self-driving cars. For example, Los Angeles is planning to include separate lanes for autonomous cars, buses and shuttles, and integrate a data-sharing relationship so that the city can better manage traffic flow. State and federal governments are also considering a number of new laws to accommodate regulation and safety standards for driverless cars.
While no one can actually know how this landscape will span out in the future, the need for autonomous vehicles is definitely hard to miss. There are two factors that this industry will bring: safety and cost. Research shows that there are more than 1 million deaths on the road worldwide. In the United States alone, that number is 36,000 deaths per year. In most cases, these fatalities happen due to human error. New developments in technologies for autonomous vehicles will help eliminate human fallibilities, which will reduce the chance of accidents. Another benefit is reducing costs. Consumers can save a significant amount of money with autonomous transportation. Morgan Stanley forecasts that autonomous vehicles could potentially help save people nearly $1.3 trillion annually. These costs can include the cost of vehicle, maintenance, insurance, and gas.
Market Trends
One key trend that has been receiving much attention around autonomous vehicles is handling cybersecurity risks. In 2015, renowned hackers Charlie Miller and Chris Valasek showed that they were able to hack into a Jeep Cherokee in downtown St. Louis and control it remotely. This led to Fiat Chrysler recalling nearly 1.4 million cars. Furthermore, in 2017, a group of Chinese security researchers were able to hack a Tesla Model X. They took control of the vehicle’s brakes, doors, and the trunk, and they were able to stream their own music from the car’s radio. To guard against future attackers, major vehicle manufacturers have prepared new technologies to fight hacking. Strong countermeasures are being created especially for high-volume vehicles like freight trucks because they usually carry valuable cargo.
Major Investments
Investments in autonomous vehicle may have a great long-term growth potential. Aside from tech giants like Tesla and Alphabet, whom are considered to be at the forefront of this industry, private companies in auto tech are also leading the charge. In addition, VC firms like Softbank invested a total of $1 billion in Uber’s self-driving subsidiary. Others include Bain Capital Ventures, which had invested $52 million for Ike in Series A. Ike is a startup that tests self-driving trucks. Amazon had also participated in a Series B round of $530 million by Sequoia Capital for Aurora Innovation.
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