The global self-driving cars market size is projected to grow from 20.3 million units in 2021 to 62.4 million units by 2030, at a CAGR of 13.3%. The growth of the market is driven by the growing demand for driver assistance systems and stringent safety mandates for a safer driving experience.
Upcoming safety mandates and increasing focus on sophisticated driving assistance features would spur the growth of self-driving solutions. Increasing focus on active safety systems and car assessment programs would drive the demand for ECUs in modern vehicles.
The increasing number of accidents due to distractions as well as alcohol-impaired driving fatalities have become a major concern for lawmakers and have sparked the demand for advanced safety features such as driver monitoring systems, automatic emergency braking, lane departure warning, and others.
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The European Union has outlined Vision Zero, an initiative to mitigate road deaths to zero by 2050. The authority targets to reduce fatalities and injuries by 50% by 2030. The strategic plan also includes mandating major safety features such as lane departure warning, automatic emergency braking, and drowsiness and attention detection in new vehicles by 2022.
Governments in countries such as India, China, the US, and European countries are subsidizing electric infrastructure, which has resulted in the growth of the BEVs segment. OEMs are focusing on launching new electric variants of existing ICE models. In addition, owing to tough competition from major EV manufacturers such as Tesla, major OEMs have planned to introduce more safety and driving assistance features to stay competitive. Leading automakers such as Nissan, Tesla, and Audi are increasingly focusing on green vehicles with more driving comfort features. Hence, the demand for ADAS solutions in the electric vehicle segment is expected to rise during the forecast.
Covid19 pandemic affected the overall car market worldwide. The first half witnessed new car registration drops around one third from the year 2020. Although registration of conventional and overall new cars dropped, global electric cars sales grew to record 4.6% of total share in 2020. In year 2020, there was increase in the electric vehicles sales, around 10 million electric vehicles were sold which was 43% more as compared to 2019. Among this battery vehicles accounted for two-third of Electric vehicles registrations. Electric vehicle sales in China were 4.5 million which was the largest fleet. Europe witnessed annual increase of 3.2 million vehicles. Increasing investment by major OEMs and Tier 1 auto component manufacturers to develop L3 driving systems is likely to spark new offerings in coming years. OEMs are also increasingly working closely with Tier 1 players and software providers to deploy autonomous driving systems.
Components for self-driving vehicles such as LiDAR are currently expensive, and the reliability of these components is still being explored. However, the cost of LiDAR is significantly decreasing over time. For instance, Volvo announced plans to produce vehicles with LiDAR in 2022. The automaker partnered with Luminar, a major LiDAR technology focus startup. According to the company, LiDAR cost can be low as USD 1,000 for level 5 autonomy and USD 500 for driving assistance if produced at a scale. LiDAR systems are also being used in the development of fully autonomous cars by companies such as Waymo (US), Ford Motor Company (US), Nissan Motor Company (Japan), and others. These autonomous cars have performed well under controlled conditions and are expected to be fully commercialized in the coming years.
In the short term, level 1 and level 2 self-driving cars are expected to provide huge growth opportunities for OEMs, technology providers, sensor suppliers, and HD mapping companies. Level 1 ADAS typically include ADAS features such as adaptive cruise control, lane centering, and park assist systems. These systems are already available in most of luxury and mid-segment cars in developed markets. OEMs are offering more and more ADAS features in economic segment cars. Level 2 ADAS driving systems are designed to drive a vehicle with minimal input from the human driver. More development in L3, L4, and L5 driving systems would further strengthen the self-driving cars market.
The Asia Pacific region is expected to be the largest market for self-driving cars during the forecast period. Leading automakers in the region, such as Toyota, Honda, and Hyundai, leverage the advantages of safety systems and have made essential safety features a standard across their models. Stringent regulations imposed on vehicles for safety are also influencing the market growth. These regulations are as stringent as the regulations set in North America and Europe. Moreover, improving socio-economic conditions in emerging nations, such as India, Indonesia, and Thailand, has resulted in an increased demand for premium segment passenger cars, which, in turn, increases the demand for advanced driver assistance systems and thereby drives the self-driving cars industry in this region. Regulations and guidelines for autonomous and semi-autonomous differ depending on countries and regions. Regions such as North America and Europe have formed their set of regulations, which are to comply with various levels of autonomy in vehicles. These regulations act as a driving factor for adopting self-driving cars.
Key Market Players:
The autonomous / self-driving cars companies are General Motors (US), Ford (US), Daimler (Germany), Volkswagen (Germany), Toyota (Japan) and Waymo (US). These companies have adopted strategies such as new product development, expansion, collaborations, partnerships, and mergers & acquisitions to gain traction in the Autonomous cars Market. Partnership and collaboration are the most widely adopted strategies by major players.
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