Europe Autonomous Vehicle Market Outlook, 2029

The European autonomous vehicle industry stands at the forefront of technological innovation, driving forward the vision of a future where mobility is redefined by intelligence and automation. With a rich tapestry of automotive heritage and a strong emphasis on sustainability and safety, Europe has emerged as a pivotal hub for the research, development, and deployment of autonomous driving technologies. From bustling urban centres to sprawling countryside landscapes, the continent serves as a diverse testing ground for autonomous vehicles, encompassing a wide range of road conditions, traffic scenarios, and regulatory environments.

European automakers, tech giants, and startups alike are investing heavily in advancing autonomous vehicle technologies, leveraging cutting-edge sensors, artificial intelligence, and connectivity solutions to create vehicles capable of navigating complex environments with precision and efficiency. As Europe continues to lead the charge in shaping the future of autonomous mobility, the industry stands poised to revolutionise transportation, ushering in an era of unprecedented convenience, sustainability, and accessibility for all. The adoption of autonomous cars is primarily motivated by the need to improve road safety. Considering that human error is the primary cause of accidents, there is a significant push to use autonomous technology in Europe, where over 25,000 road deaths are reported each year. By using cutting-edge sensors, real-time data processing, and predictive algorithms to identify and react to possible dangers more quickly than human drivers, autonomous cars have the potential to reduce the number of accidents.

According to the research report "Europe Autonomous Vehicle Market Outlook, 2029,", the Europe Autonomous Vehicle market is projected to add more than USD 29 Billion from 2024 to 2029. The rapid urbanisation and population growth in European cities have led to increased traffic congestion, pollution, and commuting times. Autonomous vehicles offer the promise of alleviating congestion and improving traffic flow by optimising routes, reducing idle time, and enabling platooning and cooperative driving strategies. As cities strive to become more livable and sustainable, the demand for autonomous mobility solutions is expected to rise.

Furthermore, Europe has an ageing population, with a significant proportion of elderly individuals who face mobility challenges due to age-related impairments or disabilities. Autonomous vehicles can provide independent mobility solutions for seniors, enabling them to access essential services, social activities, and healthcare without relying on traditional transportation options. As the population ages, there is a growing need for autonomous vehicles that cater to the mobility needs of older adults. Europe boasts a vibrant innovation ecosystem comprising automakers, technology companies, research institutions, and startups dedicated to advancing autonomous vehicle technologies. Collaborative research initiatives, public-private partnerships, and government funding support innovation in areas such as sensor development, artificial intelligence, connectivity, and cybersecurity. This ecosystem fosters the development of cutting-edge autonomous technologies and accelerates their commercialization, driving demand for autonomous vehicles in the European market.

Market Drivers

• Safety concerns: Safety concerns drive the development and adoption of AV technology as a promising solution to reduce road accidents caused by human error. Europe has a strong focus on improving road safety, and AVs offer the potential to minimise accidents by leveraging advanced sensors and artificial intelligence to detect and respond to hazards more effectively than human drivers. By incorporating features like collision avoidance systems, pedestrian detection, and emergency braking, AVs aim to significantly reduce the number of traffic accidents, injuries, and fatalities on European roads.
• Urbanisation and Congestion: Additionally, urbanisation and congestion are driving the demand for AVs as cities across Europe grapple with increasing traffic congestion, pollution, and challenges with traditional transportation systems. AVs offer the promise of alleviating urban congestion by optimising traffic flow, reducing commute times, and enhancing the efficiency of transportation networks. With features like platooning and cooperative driving, AVs can enhance mobility in densely populated urban areas, providing convenient and sustainable transportation options for residents while reducing the environmental impact of congestion-related emissions. Overall, safety concerns and urbanisation-driven congestion are driving forces behind the development and adoption of AV technology in Europe, shaping the future of transportation and mobility in the region.

Market Challenges

• Cybersecurity: Cybersecurity risks pose a substantial threat to the safety and integrity of AV systems. With increasing reliance on software, connectivity, and data processing, AVs are vulnerable to cyberattack, including hacking, malware, and data breaches. Malicious actors could exploit vulnerabilities in AVs' software and communication systems to gain unauthorised access, manipulate vehicle behaviour, or compromise passenger safety and privacy. Addressing cybersecurity risks requires robust measures to secure AV systems, networks, and data against potential threats, including encryption, authentication, intrusion detection, and regular software updates. Building resilience against cyberattack is essential to ensuring the trust, safety, and reliability of AV technology.
• Public perception and acceptance: Public perception and acceptance are critical determinants of the successful adoption of AVs in Europe. While AVs hold the promise of improving road safety, reducing congestion, and enhancing mobility, public attitudes towards autonomous technology vary widely, ranging from excitement and curiosity to scepticism and apprehension. Concerns about safety, privacy, job displacement, and the ethical implications of AVs can contribute to resistance and opposition from the public. Addressing misconceptions, building trust, and engaging stakeholders in transparent dialogue are essential for fostering acceptance and adoption of AV technology. Educating the public about the potential benefits, limitations, and risks of AVs, as well as soliciting feedback and addressing concerns, can help mitigate resistance and build confidence in autonomous technology. Ultimately, building public trust and acceptance is crucial for the successful integration of AVs into European transportation systems and communities.

Based on the vehicle type, they are segmented into passenger cars and commercial vehicles. Furthermore, the types are segmented into semi-autonomous and fully autonomous.

In Europe, passenger cars lead the market. Passenger cars represent the largest segment of the automotive market in Europe, accounting for the majority of vehicle sales and registrations. As such, there is significant consumer demand for autonomous technology in passenger vehicles, driven by factors such as convenience, safety, and the potential for enhanced mobility services. Europe's densely populated urban centres face challenges related to congestion, pollution, and limited parking space. Autonomous passenger cars offer the potential to alleviate these issues by providing efficient and flexible urban mobility solutions.

Consumers in urban areas are particularly interested in autonomous ride-hailing and car-sharing services, which can offer on-demand transportation without the need for personal vehicle ownership. European automakers and technology companies are at the forefront of autonomous vehicle innovation, investing heavily in research and development to develop advanced driver assistance systems (ADAS) and autonomous driving technology. Companies such as BMW, Mercedes-Benz, Volvo, and Volkswagen are actively developing and testing autonomous passenger car prototypes, aiming to bring fully autonomous vehicles to market in the near future. Furthermore, in Europe, the Fully Autonomous market is growing. European cities face challenges such as congestion, pollution, and limited parking space. Fully autonomous vehicles offer a potential solution by providing efficient and convenient urban mobility options. Autonomous ride-hailing and car-sharing services, enabled by fully autonomous technology, can offer on-demand transportation without the need for personal vehicle ownership, reducing traffic congestion and emissions in urban areas. Public attitudes towards fully autonomous vehicles are gradually shifting as awareness and familiarity with the technology grow. Surveys indicate that a significant portion of European consumers are open to using fully autonomous vehicles, especially for specific use cases such as ride-hailing, last-mile delivery, and mobility services for the elderly and disabled. Positive consumer perceptions and acceptance of fully autonomous technology contribute to the growing market demand.

Based on the application, they are segmented into transportation and defense.

In Europe, the defence sector contributes the highest CAGR rate during the forecast period. Advances in robotics, artificial intelligence, sensor technology, and communication systems have accelerated the development and deployment of autonomous vehicles in the defence sector. European defence contractors and research institutions are investing in research and development to develop next-generation autonomous platforms with advanced capabilities, autonomy, and resilience in challenging environments. Defence budgets in Europe are facing pressure to deliver greater efficiency and effectiveness in defence operations.

Autonomous vehicles offer cost-effective solutions for performing a wide range of military tasks, reducing the need for expensive manned platforms and personnel. By leveraging autonomous technology, defence organisations can optimise resource allocation, reduce operational costs, and enhance mission readiness. Autonomous vehicles offer the potential to enhance safety and security in defence operations by reducing the risk to military personnel in high-risk environments. Unmanned ground vehicles (UGVs) equipped with autonomous capabilities can perform tasks such as reconnaissance, surveillance, and bomb disposal in hazardous or hostile environments without putting human lives at risk. Autonomous vehicles can enhance operational efficiency in defence logistics, supply chain management, and transportation. Autonomous ground vehicles can autonomously navigate supply routes, transport cargo, and perform logistical tasks, reducing the need for human intervention and streamlining operations. Autonomous aerial vehicles can be used for aerial resupply missions, medical evacuation, and troop transport, enhancing the speed and agility of military logistics operations.

Based on the level of automation, they are segmented into Level 1, Level 2, Level 3, Level 4, and Level 5. In terms of the components, they are segmented into hardware, software, and Software and Services.

Furthermore, in terms of level 2, level 2 is leading the market. While retaining driver engagement, level 2 autonomous cars mark a substantial development in automobile technology. In order to give customers and regulators time to become used to the new technology, a gradual transition towards complete autonomy is preferred in Europe. While they don't totally eliminate the need for driver supervision, level 2 systems - which come equipped with features like automatic parking, lane-keeping assistance, and adaptive cruise control - offer noticeable advantages in terms of ease and security. European regulatory bodies have shown greater acceptance and willingness to approve Level 2 autonomous systems compared to higher levels of automation.

Regulations and standards have been developed to ensure the safety and reliability of Level 2 systems, providing a clear framework for manufacturers to comply with. This regulatory support fosters confidence among consumers and encourages the adoption of Level 2 autonomous vehicles. In terms of the components, software and services contribute the highest market share. A thriving community of software developers, digital firms, and research centres dedicated to furthering autonomous vehicle technology may be found throughout Europe. These organisations are spearheading innovation in fields including data analytics, machine learning, sensor fusion, and artificial intelligence - all of which are essential for the creation of software and services for autonomous vehicles. Europe has a strong emphasis on mobility services, including ride-hailing, car-sharing, and last-mile delivery. Autonomous vehicle software and services play a central role in enabling these mobility solutions by providing platform development, fleet management, routing optimisation, and customer experience management services.

Based on the report, the major countries covered include Germany, the United Kingdom, France, Italy, Spain, Russia, and the rest of Europe.

In Europe, Germany contributes the highest market share. Germany is home to some of the world's leading automotive manufacturers, including Volkswagen, BMW, Daimler (Mercedes-Benz), and Audi. These companies have a long history of innovation and engineering excellence in the automotive sector, making significant investments in autonomous vehicle research and development. German automotive companies have extensive expertise in advanced driver assistance systems (ADAS), sensor technologies, and software development, which are essential for autonomous vehicle development. Germany's strong engineering talent pool and research infrastructure further contribute to its leadership in autonomous vehicle technology.

German automakers collaborate closely with research institutions, universities, and technology firms to advance autonomous vehicle technology. Partnerships between industry and academia facilitate knowledge sharing, research collaboration, and technology transfer, driving innovation and competitiveness in the autonomous vehicle market. The regulatory framework in Germany is favourable to the development and testing of autonomous vehicles. For the purpose of testing autonomous cars on public roads, the German government has set rules and guidelines that give manufacturers a defined framework within which to carry out their R&D. Germany has committed a large amount of money to upcoming transportation projects, such as driverless and electric cars. In order to promote innovation and industry growth, the German government has started offering financial incentives and programmes to encourage the development, implementation, and research of autonomous vehicle technology.

The global autonomous vehicle market is highly competitive and dominated by the presence of major automotive giants. Leading market players are significantly focused towards inorganic growth strategies such as collaboration, partnership, merger & acquisition, and regional expansion. In August 2017, Intel Corporation, BMW AG, Fiat Chrysler Automobiles (FCA), and Mobileye, affiliated business of Intel Corporation contracted a memo of understanding for Fiat Chrysler Automobiles to link companies for the development of autonomous vehicle driving platform.

The memorandum aimed at collaborating capabilities, resources, and strengths of all the companies to reduce the product launch time, in addition, also enhances the development efficiency and platform technology. Moreover, industry participants also invest significantly for the product development as autonomous vehicles require high-end electronic devices for advanced automotive features. Rapidly changing consumer preference and increasing awareness among the people for environment-friendly vehicles motivate the market players to incorporate such features in their vehicles. These market players tie up with the electronic hardware manufacturing companies to meet the consumer demand.

Considered in this report

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report

• Autonomous Vehicle market Research Report with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Vehicle Type

• Passenger Car
• Commercial Vehicle

By Type

• Semi-autonomous
• Fully Autonomous

By Application

• Transportation
• Defense

By Level of Automation

• Level 1
• Level 2
• Level 3
• Level 4
• Level 5

By Component

• Hardware
• Software
• Services

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases.

After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Autonomous Vehicle industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.


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