United States Autonomous Car Market - Growth, Trends, Covid-19 Impact, and Forecasts (2022 - 2027)

The United States autonomous car market was valued at over USD 3.51 billion in 2021, and it is expected to reach over USD 9.36 billion by 2027 end, registering a CAGR of more than 17% during the Forecasts period (2022 - 2027).

The ongoing COVID-19 pandemic has hit the overall automotive industry, compelling automakers to cut down the output at their production plants. COVID-19 has also impacted the operations of many OEMs, from production to R&D, creating short-term disruption delaying autonomous vehicles development and rollouts.

Over medium term, with stringent regulations by the government focused on increasing road safety, more autonomous vehicles are being developed with highly advanced technologies integrated with smartphones through the internet creating new interest among market players to attract customers. Due to rising health concerns and changing commuting patterns, the demand among private consumers is also increasing for personal cars. According to Euromonitor’s Voice of the Industry survey, 13% of respondents indicated they plan to increase usage of cars for commuting short distances permanently.

Although Level 4 and Level 5 (as scaled by SAE) autonomous cars are unlikely to reach wide acceptance, by 2030, there would be rapid growth for Level 2 and Level 3 autonomous cars, which have advanced driver assistance systems, like collision detection, lane departure warning, and adaptive cruise control.

The demand for self-driving cars in United States region has been increasing significantly over the past three years. The demand is well supported by the collaboration between the companies across the United States. For instance,

Key Highlights

• In April 2021, Velodyne Lidar announced that it has been selected by Faraday Future (FF) as the supplier of lidar for Faraday’s FF 91 all-electric vehicle. Velodyne’s solid state Velarray H800 lidar sensors will power the FF 91’s autonomous driving system to deliver various autonomy features. Velarray H800 is a solid state lidar sensor that combines long-range perception and a broad field of view for safe navigation and collision avoidance in ADAS and autonomous mobility applications.

Apart from the aforementioned points, Mexico’s new trade agreement with the United States and Canada has involved opportunities for the transfer of autonomous technology, although there is room for improvement in infrastructure in the coming years.

Key Market Trends

Growing Adoption of Autonomous Cars to Drive Demand in the Market

The United States autonomous car market is likely to be dominated by the semi-autonomous vehicle, as the need for ease in driving and the increasing concern for safety and security are leading to the demand for high-end technology, thus, resulting in the increased demand for semi-autonomous and autonomous vehicles.

The contributing factors in the market growth are the need for safe and efficient driving options, evolution in the connected car technology, increasing research and development in the autonomous car sector, and government support for these cars in terms of policies and rebates.

• According to the NHTSA (National Highway Traffic Safety Administration), about 94% of the accidents occurring on the US roadways can be attributed to human errors, like drunken driving and speeding, among others. These can be mitigated with an autonomous car, in which the functionality may follow the speed regulations stated in particular areas.

The market expected to witness growth due to the rapid digitization in connected cars, which is adding to their demand. The two necessary components of vehicle autonomy - vehicle-to-vehicle and vehicle-to-infrastructure connectivity - can be more easily integrated into connected cars than conventional ones.

• OEM competitive rivalry has led to significant developments in this technology, to cater to the ever-increasing demand from the public. For instance, Tesla, over a period of few months in 2021, has released Fully Self Driving (FSD) update over the air to majority of its vehicle owners, leading to a kickstart of using fully autonomous vehicles.

Further Various startups working in the level 4 cars are getting new series of funding to accelerate their operation. For instance,

• In May 2021, We Ride, a level 4 autonomous driving mobility startup, announced that it completed a series C funding, from new investors included IDG Capital, Costone Capital, Cypress Star, Sky9 Capital, and K3 Ventures, while CMC Capital, QimingVenture Partners, and other early investors also participated in the funding.
• In April 2021, We Ride has been granted a fully unmanned driving test license by California Department of Motor Vehicles, United States.

Owing to such intense competitive rivalry and other factors involving different types of vehicle automation in the country, the demand for fully autonomous vehicles in the United States is expected to witness significant growth rate during the Forecasts period.

Demand for Conditional Automation Expected to Rise Over Forecasts period

The United States autonomous car market, by the level of automation, is dominated by conditional automation (Level 3). In Level 3 automation, the autonomous vehicle driving system performs all the dynamic driving tasks, expecting the human driver to respond appropriately to the request to intervene. The dynamic driving task includes steering, braking, accelerating, and monitoring the vehicle, along with responding to events happening on the road.

• Self-driving cars have already been tested and used in California, Texas, Arizona, Washington, Michigan, and other states of the United States. However, their mobility is currently restricted to specific test areas and driving conditions. Audi is the first company to come up with a Level 3 autonomous car by launching the Audi A8 in the market. However, there are few limitations for Level 3 autonomous cars, such as constant awareness needed from the driver. Thus, this makes Level 3 automation less dependable.
• In 2022, German automaker Mercedes-Benz is the world's first automaker to gain internationally valid regulatory approval in producing vehicles capable of Level 3 autonomous or "conditionally automated" driving. Mercedes-Benz's updated Drive Pilot system can take over the driving chores while the vehicle is traveling at the legally permitted speed of 37 mph (60 kph).

Consequently, several automotive manufacturers are pushing directly for level 3 autonomous cars and various technology companies in the country are reaching new milestones in terms of total miles tested. Such developments across United States expected to drive demand in the market.

Competitive Landscape

The United States autonomous car market is consolidated and is majorly dominated by a few players, such as Apple, Waymo, Tesla, Ford, Honda, BMW, Nissan, Intel, and Uber. These players have also encompassed strategies such as brand reinforcement, innovation, collaboration, and M&A to gain a higher competitive share. For instance,

• In December 2021, Aurora has launched a pilot program with Uber Technologies Inc. to transport goods autnomously acros Texas, Company aims to launch their commercial autonomous trucking by the 0f 2023.
• In February 2021, Aurora announced that it entered a strategic collaboration with Toyota and Denso to build and deploy self-driving cars on a large scale. The collaboration will develop and test driverless vehicles equipped with the Aurora Driver, starting with the Toyota Sienna. By the end of 2021, companies are expecting to begun testing an initial fleet of Siennas.

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