Study: Suppliers Will See Up to $25 Billion in Autonomous Tech Revenue by 2020

While self-driving cars are projected to take another decade or two before showing up at dealer showrooms, suppliers are seeing the payoff right now.

A new study reports that by 2020, vehicles that can accelerate, brake and steer themselves from sensors and software will generate additional annual sales of $20 billion to $25 billion. AlixPartners based the forecasting for its study on market surveys published this year by two consulting firms, Dolcera and IHS Automotive.

Dolcera, based in San Mateo, Calif., forecasted that revenue from the sale of navigation maps, collision-avoidance programs, and other features will range from $10 billion to $15 billion. IHS Automotive, of Detroit, predicts that sales of vehicle cameras, radar, ultrasonic sensors, and Lidar will generate an estimated $9.9 billion in annual revenues.

“It’s not a mature market yet,” said Mark Wakefield, a managing director at AlixPartners who co-authored the report. “The “take rate’ is still going up, and it’s well above the market growth of vehicles.”

Radar, cameras and ultrasonic sensors each have established markets, but Lidar is just starting to attract automaker attention. Lidar, a vision technology that uses light from a laser to track the distance of objects, is expected to see growing demand as suppliers cut costs and shrink the hardware package. Several of the industry’s largest suppliers, including Continental AG, Robert Bosch GmbH, Valeo, Autoliv, Delphi and Denso, are developing Lidar products.

SEE ALSO: Self-Driving Cars Will Bring More Cars to U.S. Roads, Researchers Say

Silicon Valley companies are poised to dominate the market for vehicle software as automakers begin to take autonomous vehicle technologies very seriously.

“I think Google is probably in the best position,” Wakefield said. “And Mobileye is hot and heavy in this space,” he added, referring to the fast-growing supplier of obstacle-detection software.

Both of these technology companies have made inroads with automotive partners. Google is working with Fiat Chrysler Automobiles on a test project with 100 self-driving Chrysler Pacifica minivans. Israel-based Mobileye provides cameras, software and other components that allow vehicles to see the world around them. Mobileye is partnering with BMW and Intel on autonomous vehicle technology.

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