Self-driving Cars Will Be $87 Billion Market by 2030

Illustration: Randi Klett

Earlier this week, I wrote about Google's latest self-driving car demo. The company’s fleet of autonomous vehicles give us a window to the future of automobile travel. But a new report from Lux Research released this week adjusts the view a bit, describing the opportunities and challenges that lie ahead.

The report notes that as today's premium driver-assist and safety options become standard features, these "smart car" technologies will become a US $87 billion in 2030, offering new and potentially lucrative revenue streams for automakers as well as the suppliers of advanced hardware and software for vehicles.

So despite the hype over self-driving cars, most of the change in the automobile market will come in the form of near-universal availability of driver-assist features such as adaptive cruise controllane departure warning, and autonomous emergency breaking—capabilities that we already see in high end vehicles. 

In fact, says the Lux report, these safety packages, which are in about 3 percent of the world’s cars today, will be featured in 92 percent of the vehicles that land in dealer showrooms in 2030.The more enhanced functions represented by Google’s fleet—the ability to operate autonomously under certain conditions, in places that have been extensively mapped—will be available in only 8 percent of 2030 model year vehicles.

And what about the car that only needs you to tell it where to go (and to park itself once you’ve reached your destination)? If the report is correct in in its predictions, we’ll still be awaiting its arrival come 2030. 

The makers of software that, among other things, brings sensor inputs together and uses artificial intelligence to calculate safe navigation paths will see the biggest windfall. They stand to rake in revenues of about $25 billion a year. Apparently, cars will become more like our computers and smartphones, depending on whiz-bang software capabilities to differentiate themselves in the marketplace.

And as demand for more processing power explodes, so too will the amount of computing hardware onboard. According to the Lux report, smart cars will be a $13-billion hardware market by 2030.

“Sensor hardware specialists like Velodyne Lidar are developing products with unprecedented resolution; software and big-data powerhouses like IBM and Google are striking up partnerships; and even mapping and connectivity experts like Nokia and Cisco are throwing their hats into the ring,” says Cosmin Laslau, the report’s author.

In other words, automakers and their growing list of technology partners stand to make a huge profit from driver assistance systems before the the day when someone turns a car on, gives a few voice commands, and leaves the rest to the machine.

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