The Future of Driving: The Autonomous Car Market

Once a futuristic dream, autonomous vehicles (AVs) are now a reality, thanks to rapid technological advancements that began with cruise control and lane assist. Today, it's impossible to buy a car without some form of assist, with automation becoming a standard feature. From cruise control to lane assist back-up sensors and self-parking, cars are increasingly autonomous.

Companies across the value chain, from automakers to technology providers, are racing to bring AV technology to life. Robotaxi services by companies like Waymo and Baidu are already testing self-driving cars in select cities in the US and China, paving the way for a future of autonomous mobility and vying for brand dominance.

With a CAGR of 29.7%, the global AV market is projected to reach 2.75 trillion by 2033 from nearly 158 billion USD in 2023.^[1]

AVs offer more than a convenient alternative to freeing the hands of a would-be driver; they have the potential to revolutionize the transportation landscape, from public transit to private delivery. Van and bus AVs could blur the lines between public and private transit sectors, becoming more capable of planning routes and coordinating multiple passengers' journeys. In the long term, they are expected to bring efficiency to the transportation sector, streamline city planning, improve urban flow, and reduce congestion costs for both the public and private sectors.

AV technology can be applied across the entire supply chain, from long-distance transportation—with self-driving trucks operating 24 hours a day—to greatly improved and efficient last-mile delivery. Given that an estimated 94% of motor vehicle accidents are caused by driver error,^[2] AVs are also expected to significantly improve overall road safety.

Introducing the Roadblocks

AVs rely on a complex network of cutting-edge technologies to navigate roads, detect obstacles, and make split-second decisions. These technologies include cameras, LiDAR, radar, ultrasonic sensors, GPS, and powerful onboard computing systems. Each component plays a crucial role in enabling vehicles to operate safely and efficiently, without human intervention.

Recent advances in artificial intelligence (AI) and machine learning have been critical to improving the reliability of AV systems, but creating a fully autonomous vehicle capable of functioning in diverse environments remains a significant challenge. This requires the seamless integration of hardware, software, and real-time data processing. Major obstacles include:

• Weather and Lighting Conditions: Cameras and LiDAR struggle in poor visibility conditions such as heavy rain, snow, fog, and low light.
• Data Processing Speed: AVs must process massive amounts of data from their sensors to make real-time decisions. This requires not only powerful computing systems but also highly efficient software.
• Costs: The high cost of certain technologies, especially LiDAR, remains a barrier to widespread adoption. Building the systems redundancy required for safety adds complexity and cost.

Varying levels of automation allow functionalities to be built into and improved through the use of today’s cars, exclusive of one another. Level 1 automation includes features like cruise control, while Level 2 offers lane-assistance. Level 5 represents full automation.

Key Players in the AV Industry

Currently, around 250 public companies, including automakers, technology providers and service companies,^[3] are primarily involved in developing AVs. Prominent automakers in this space include Waymo (a subsidiary of Alphabet), Baidu, Zoox (owned by Amazon), and Tesla.

• Waymo: Launched by Google in 2009, Waymo now operates self-driving vehicles without human supervision in San Francisco, Phoenix and Los Angeles.^[4] These vehicles became available to the public in June 2024, with no need for a driver to be present.

• Baidu: Similar to Waymo, Baidu operates its Apollo Go Robotaxi service in Wuhan, China. Some of these taxis are fully autonomous, while others still have human drivers as safety monitors.

• Zoox: Acquired by Amazon in 2020, Zoox is developing a unique robotaxi for public use in Las Vegas. Zoox vehicles are designed from the ground up to be fully autonomous, with no steering wheel or driver seat. They feature four-wheel steering, allowing them to drive in any direction, and doors that open on either side for safe entry and exit.

• Tesla: Elon Musk has claimed that Tesla’s Full Self-Driving (FSD) system will operate more safely than human drivers by the end of 2025. However, independent tests by AMCI revealed that Tesla’s FSD system currently requires manual steering adjustments every 21 km on average.^[5] Tesla’s reliance on a “camera-mostly” strategy may prove advantageous in terms of cost if it proves as reliable as LiDAR-based systems used by Waymo and others.

Parts, technology and service providers like Valeo, Luminar Technologies, Mobileye Global, Infineon Technologies, TomTom and Arbe Robotics are also among the companies shaping the AV industry.

• Valeo: A global automotive supplier, Valeo offers a comprehensive range of advanced driver assistance systems (ADAS), including radars, lidar, cameras and software.

• Luminar Technologies: A global automotive technology company, Luminar is a leader in LiDAR and ADAS technology. The company has been building its light detection and ranging (LiDAR) sensor from the chip level up.

• Mobileye Global: A leader in the development and deployment of advanced driver assistance systems (ADAS) and autonomous driving technologies and solutions, both software and hardware.

• Infineon Technologies: A global semiconductor company, Infineon provides electronic and other key components for electric and AVs.

• TomTom: A provider of navigation and location-based products and services, TomTom's road network data is used for search, vehicle navigation, location-dependent ADAS functions, and automated driving.

• Arbe Robotics: A provider of 4D imaging radar solutions, Arbe enables safe driver-assist systems and paves the way for fully autonomous driving.The company supplies leading Tier 1s and car manufacturers with advanced sensing and perception technology.

BITA’s Global Autonomous Driving Select NTR Index tracks the performance of large publicly traded companies involved in AV manufacturing, as well as the development and production of enabling software, hardware, and systems.
BITA’s research covers a significant portion of the industry, including vehicle manufacturers and companies along the entire supply chain, such as those specializing in LiDAR sensors, vehicle navigation, software, and chips.

BITA's Proprietary Data Team meticulously analyzes revenue streams across cutting-edge areas of all industries. Our 90 investment themes range from finance, technology, sustainability, social impact, food, health, leisure, sports, and culture to full coverage of controversial business involvement. BITA also tracks ESG data such as emissions, waste, and net-zero commitments.

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