A new study says that a significant percentage of drivers are interested in buying a partially or fully self-driving car, which will lead to a $42 billion market.
The Boston Consulting Group (BCG), a business consulting firm and author of the study, said consumer interest in autonomous vehicles (AVs) is surprisingly strong. When combined with the advancing technology, a substantial market opportunity for original equipment manufacturers (OEMs) is created.
The study also predicts that this growth isn’t that far away. In the next two years, BCG says partially self-driving cars will be on the roads, with fully autonomous cars arriving in the next decade.
“Many people don’t realize how far along some of these technologies are,” said Xavier Mosquet, North America leader of BCG’s Automotive practice and managing director of the firm’s Detroit office. “Even more surprising, consumer interest and the production costs will make autonomous vehicles highly attractive to both carmakers and their customers. We are witnessing a decades-old dream come true. But OEMs and technology suppliers will need time to build the right scale and reduce costs.”
BCG predicts that by 2025 the AV market will create opportunities to the tune of $42 billion. This will continue to grow, with AVs reaching 25-precent market penetration in 20 years. The study estimates that this market will break down to 15-percent (18 million units) partially self-driving vehicles and 10-percent (12 million units) of fully autonomous vehicles.
“Carmakers need to act now to prepare for this future. A significant new market is still theirs for the taking,” said Thomas Dauner, global leader of BCG’s Automotive practice and a Stuttgart-based senior partner. “They should step up R&D investment in autonomous-driving features, with an expanded focus on software, sensor fusion, and system integration. OEMs would also have to address alternate market segmentation in order to adapt to new trade-offs that consumers will make between autonomy and other car features.”
Mercedes-Benz, Tesla, Cadillac and Audi are four examples the study gave of companies ready to roll out hands-free and partially autonomous systems in 2015 and 2016 models.
In order to reach the market’s full potential, BCG says three main areas of concern need to be addressed before the public can fully accept autonomous vehicles: the threat of cyberattacks, debates over liability if AVs are in an accident, and a lack of precisely mapped roads.