A study, recently conducted by the strategic consulting and market research firm, BlueWeave Consulting revealed that the global autonomous vehicle is projected to reach USD 52.4 billion by 2027, growing at a CAGR of 14.5% during 2021-2027 (forecast period). The growth of the global autonomous vehicle market is driven by several factors. The elimination of accidents (due to manual errors) and the reduction of carbon dioxide emissions from autonomous vehicles are the primary factors contributing to the growth of the market. Furthermore, the lower gas and battery usage by an autonomous vehicle, as well as the high penetration of the automotive industry contribute to the overall growth of the market. However, the low customer acceptance rate and the growing threat of hackers in the driving operation have stifled the market growth. Additionally, high initial costs, combined with an increased risk of failure could limit the industry's growth to some degree.
Benefits Over Manual Cars Augmenting the Market Growth
Autonomous car technology has a huge potential to significantly increase safety as well as minimize energy consumption and congestion. Conventional manual driving imposes costs borne by the driver, such as insurance, car fuel, and depreciation, along with the considerable external costs on the public. Autonomous car technology not only eliminates these drawbacks but also offers enhanced safety and efficiency. Moreover, autonomous cars expand the roadway capacity and lessen congestion with the help of GPS technology. This feature efficiently routes cars through traffic jams and makes driving easier. Especially in the event of congestion, computerized systems can side-track a specific percentage of cars off the highways and the surface streets. This subsequently would minimize travel times and reduce fuel wastage in traffic, besides enhancing productivity.
Furthermore, autonomous systems possess the ability to adjust routing patterns for heavy cars, such as trucks, to evade vulnerable infrastructure thereby, cutting costs and conserving the lifespan of crucial roadways and bridges. Autonomous cars will also diminish high-risk driving. Additionally, increased road capacity contributes to lower costs. Furthermore, these cars are capable of facilitating car platooning, which in turn reduces the intersection stops and congestion. What’s more, autonomous cars also have the capability of finding their own parking space, thereby adding to the convenience of motorists and reducing the total parking cost.
Technological Advancements Driving the Market Growth
The surging technological advancements aiming at offering enhanced features while reducing costs are a major factor expected to drive the demand for autonomous cars during the forecast period. The key features include forward collision avoidance, advanced driver assistance, backup cameras, lane detection, adaptive cruise control (AAC), and short-range and long-range radars for automatic parking, among others. Additionally, active cruise control is a highly preferred feature that regulates the acceleration and braking of autonomous vehicles automatically. What’s more, the odometer powered by LIDAR aids in the 3D mapping of the environment while GPS-enabled Dead Reckoning sensors are used for the odometer. Dead reckoning uses the difference in measurements from the right and left wheels which, when combined with speed and odometer data, can precisely locate the vehicle via stored cartographic data. Parking, pedestrian detection, and other obstacle detection are all aided by the ultrasound functionality. Additionally, blind-spots are detected by the CMOS image sensors, which are also capable of identifying traffic signs. Other technologies that are projected to be incorporated by the end of the forecast period include pedestrian detection, cyclist detection, and animal detection.
Impact of COVID-19
The COVID-19 pandemic has severely affected the global economy. Significant economic impacts have already occurred globally due to reduced production, disruption of trade, and closure of businesses. According to the estimates by the United Nations, the global economy could shrink by almost 0.9-1% this year. The COVID-19 has also hampered the growth of the autonomous vehicle market. The automobile industry is a pillar of the global economy automotive sector which had already undergone considerable slowdown since last 12-18 months from 2019 to 2020 due to the COVID-19 pandemic. The supply of automotive components all over the world has been disrupted due to restrictions on import-export activities by several countries.
The COVID-19 pandemic has led to the suspension of vehicle production, and supply disruptions, which has, in turn, brought the automotive industry to a standstill. Lower vehicle sales were one of the major concerns for autonomous cars in the first and second quarter of 2020 and the same is predicted for the next quarters. According to experts, the autonomous cars market, however, is expected to witness a significant rise by 2022, due to the mandates introduced by the governments of different countries. However, based on the said prediction, lower vehicle sales and an abrupt halt in the upgrade of new automotive technologies are likely to result in sluggish growth of the autonomous cars market in 2021.
North America dominates the overall autonomous vehicle market and is projected to lead the market over the forecast period, followed by Europe. Since extensive research and development facilities are making substantial investments in smart automotive production methods and process automation, the United States is the leading country in the North American region. The Asia-Pacific region is also expected to grow at a faster rate, due to factors such as increasing disposable income levels increased vehicle production in developing countries such as India and China, and an increase in the number of luxury vehicles in different APAC countries, which are driving the growth of autonomous vehicle market.
Since it is difficult to match the high capital requirements, the presence of leading players in this market space significantly reduces the prospects for new entrants. Some of the key players in the global autonomous vehicle market are Aptiv PLC, Honda Motor Corporation, Daimler AG (Mercedes Benz), Jaguar, Tesla, Toyota, General Motors, Volkswagen, BMW, Ford Motor Company, Continental AG, Baidu, Volvo Car Corporation, and Other Prominent Players. In order to improve their production capability, and product portfolio and gain a competitive edge over competitors, the market leaders are increasingly participating in acquisitions, alliances, and mergers.
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