US autonomous vehicle market could hit $560 billion by 2035

25 July 2019 Consulting.us 3 min. read

The autonomous market as a whole is projected to grow by $560 billion by 2035. The transformation will significantly improve efficiencies and reduce negative externalities – particularly accidents, congestion, and energy use.

Autonomous vehicles (AVs) offer a range of benefits to users and societies. Accidents could see reductions of up to 70% per year, with considerable savings to economies and wellbeing. Costs to users could fall by 35%, with such vehicles suffering lower wear and tear. Electric vehicles (largely expected as the standard for AVs) are considerably more energy efficient, while connected cars can platoon to drive even more efficiencies. Finally, insurance premiums could fall as risks around accidents are reduced.

New analysis explores some of the wider impacts such efficiencies could produce for the US and the world. The analysis by A.T. Kearney is part of the firm’s ‘How Automakers can Survive the Self-Driving Era’ report.

The economic benefits autonomous vehicles bring could represent a $1.3 billion boost to the US economy – including almost $150 billion from reduced congestion, $500 billion from the cars themselves, and almost $500 billion from a reduction in accidents. Meanwhile, up to 1.9 trillion minutes of time could be unlocked by the technology.

The development of autonomous vehicles is by no means complete, with a development period of up to 20 years until fully automated vehicles are a widespread reality.

The market around AV vehicles is projected to become huge, with onboard guidance, control, and communications systems estimated at $103 billion, and mobile apps tagged at $83 billion. The market for the vehicles themselves is projected to be worth up to $95 billion before the end of the 2020s.

Between 2030 and 2035, the firm estimates that the market could double to $560 billion, or around 17% of the total automotive market.

The number of freed minutes currently locked up in travel could, by 2035, reach 4 trillion.

The market remains relatively fragmented, with OEMs and large tech firms, among others, seeking to carve out space in the market – often with different overall ideas about what a market of autonomous vehicles looks like.

The advance of the technology is projected to occur in relative leaps over the coming decade, with various generations of autonomous vehicles technologies being rolled out. These technologies tend to be considered driver assists, in so far as they provide emergency support and other forms of assistance to a driver, who remains at the helm. Only at the end of the development cycle, and assuming it meets various criteria, is there fully autonomous technology.

The research also notes that various new standards will need to be achieved for the technology to be able to be implemented – at the technical level, but also integrated into wider public policy and regulatory frameworks. Infrastructure would also need to be deployed to meet the requirements, whatever they turn out to be, for the deployment of driverless vehicles.