Autonomous Vehicle Reality Check: Widespread Adoption Remains at Least a Decade Away

The era of peak hype has passed, but forecasters still see
long-term adoption in certain segments that benefit from today’s
rise in automated driving technology

A world of self-driving vehicles and mobility-on-demand is
likely to exist eventually, but for the next decade, widespread
implementation of autonomous technology will not be realized,
according to a new forecast from S&P Global Mobility. The
report reflects findings from robust model-level forecasting that
autonomous vehicle expectations have not been fulfilled and still
face more headwinds – affording significant opportunity and scale
to automated driving implementations in the interim.

For the next decade, autonomous tech will be limited to two
specific areas: geofenced robotaxis operated by fleets in specific
areas, and hands-off systems with various safeguards in personal
vehicles that will still require some form of driver
engagement.

The latest forecast from S&P Global Mobility notes that
Level 5 Autonomy – “A vehicle that can go anywhere and do
everything a human driver can,” will not be publicly available
before 2035, “and probably for some time after that,” stated Jeremy
Carlson, associate director for the autonomy practice at S&P
Global Mobility. “But the outlook for more targeted implementations
of the same fundamental technologies, especially in Level 2+ and
Level 3 but also for some forms of Level 4, is more positive and
will certainly happen on a much shorter timeline.”

This latest outlook from S&P Global Mobility reflects the
headwinds and slower pace of development that both the automotive
and tech industries have demonstrated over the past several years.
It paints a stark contrast to the optimism of just five years ago
when the world was swept up in the promise and excitement of a
future of self-driving vehicles in Levels 4 and 5. Now, S&P
Global Mobility presents a more realistic outlook amid this
moderated pace of progress while also publishing new data on the
intersection of autonomy and mobility-as-a-service (MaaS).

Automated – rather than autonomous – driving continues to be the
focus of industry development. Today’s broad deployments of Level
2+ and Level 3 systems by many automakers in multiple regions will
reach at least 31% of new vehicle sales globally by 2035, according
to the forecast. Level 2+ and Level 3 allow the driver to be
hands-off while supervising, or to disengage entirely in specific
driving scenarios, such as in Super Cruise by General Motors and
Drive Pilot by Mercedes-Benz, respectively.

“There is immense opportunity for automated driving systems in
Level 2+ and Level 3, and they are benefiting from the
standardization of basic safety features which provide a foundation
of in-vehicle architecture, sensing, and compute,” Carlson says.
“Their functionality also complements driving today rather than
fully replacing the driver, making consumer adoption less of a
challenge. The next several years of wider deployment across brands
and vehicle platforms will be a boon for automakers selling these
optional features as well as suppliers who continue to build scale
and a strong foundation for the future.”

L4 Technology Slow to Develop in Personal Vehicles –
MaaS Robo-taxis to Lead the Way

The S&P Global Mobility forecast predicts fewer than 6% of
light vehicles sold in 2035 will have any Level 4 functionality, as
described by the SAE J3016 classification. Early Level 4
implementations in personally-owned vehicles offer advanced parking
functions, often with the support of infrastructure. But many
technology providers remain focused on the long-term potential of
scaling autonomous vehicles in fleets supporting MaaS business
models.

There are positive examples of autonomous vehicles performing as
well as humans in today’s pilot programs in places like San
Francisco and Phoenix in the US, and Beijing, Shanghai and
Guangzhou in Mainland China. But these same vehicles can still be
confounded by complex traffic scenarios the next minute or the next
day, giving regulators and consumers alike reason to be
cautious.

Mobility-as-a-Service (MaaS) and robo-taxis are nonetheless
expected to lead the transition to an autonomous vehicle future,
even with the relatively cautious growth ahead. There are growing
numbers of small-scale deployments in certain cities around the
world. But S&P Global Mobility forecasters do not expect that
to become widespread and broadly accessible within the next
decade.

MaaS-equipped vehicles and robo-taxi applications are expected
to represent less than 800,000 vehicles sold globally in 2035.
Robo-taxis will be carefully geofenced for the foreseeable future –
offering revenue service only within specific areas where they have
already been extensively tested, Carlson predicts. But their high
rate of utilization can be nonetheless effective at bringing new
mobility options to some consumers and new revenue streams to
automakers and mobility providers.

Owen Chen, senior principal analyst from S&P Global
Mobility, explains that robo-taxi development and commercialization
is a complex and multi-stage process which can be summarized in
three stages. First, technical feasibility demonstrations confirm
that robo-taxis can operate safely and reliably in the targeted
conditions. Second, the long process of technology optimization,
integration, and refining vehicle design eventually brings scale to
manufacturing and deployment. Third is the efficient expansion to
many new locations and operating conditions, with profit on top of
revenue from meaningful adoption by consumers. Chen adds that, “In
2023, many are working through stage 1 while several are seeking
scale in stage 2, led by Mainland China and the US. But the
opportunity to restructure personal and shared mobility
exists.”

In August, the California Public Utility Commission approved an
expansion of operations in San Francisco for Waymo and Cruise.
Mainland Chinese regulators are also enabling providers like Baidu
Apollo, Pony AI, WeRide and more to test or operate paid services
in parts of many major Chinese cities. Europe is also actively
developing regulations to help bring some uniformity to such
vehicles and services across the region.

While the US captured an early lead in both development and
deployment of Level 4 MaaS, Mainland China is expected to
contribute the greatest volumes long-term, followed by the US and
Europe in that order, according to S&P Global Mobility.

Challenges nonetheless remain for successful and widespread
deployment of Level 4 MaaS. In addition to a fragmented regulatory
landscape and
relatively low public trust that may hamper consumer acceptance
and adoption, the cost of technology and the time needed for robust
development and validation of hardware and software have quashed
the optimism that defined much of the last decade.

Reduced complexity in Level 2+ and Level 3 features face less
risk or uncertainty for each of these factors, hence the more
positive outlook for those technologies in the short term. This
optimism is further boosted as some regulators are also mandating
certain basic safety assistance features that will generate even
wider exposure for selective automation.

Automakers, suppliers, technology companies and mobility
providers alike, however, remain committed to a future of safe and
equitable autonomous mobility, even if it takes more time to get
there.

“There’s plenty of opportunity and growth ahead,” says Carlson.
“Significant volumes measured in the hundreds of thousands per year
are quite likely to come before 2030—but a future of shared
mobility everywhere all the time will remain an aspiration for the
industry.”

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This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.