The Fuse

IHS: Autonomous Vehicles to Take Off Faster Than Originally Expected

by Matt Piotrowski | June 09, 2016

More and more experts are turning bullish on autonomous vehicles. In what has been seen as a distant prospect, wide-scale deployment of autonomous cars is closer than most originally thought.

More and more experts are turning bullish on autonomous vehicles. In what has been seen as a distant prospect, wide-scale deployment of autonomous cars is closer than most originally thought.

IHS Automotive now sees some 21 million autonomous vehicles sold by 2035, a “substantial” increase from the consultancy’s previous forecast. Global sales should hit 600,000 by 2025, but then take off in the following decade, growing by a 43 percent annual compound growth rate. A host of factors is behind this surge. The proliferation of car-sharing and ride-sharing services is one key component, while increased investment from suppliers and technology companies, along with more activity from research and development centers, will also help accelerate the transition.

Jeremy Carlson, principal analyst at IHS Automotive, told The Fuse: “Increased activity from the automotive and technology industries, mobility trends in urban areas, and positive signs from regulators are speeding up the process. A lot of resources are going into autonomous vehicles.”

U.S. to lead

Different markets will see different penetration levels amid contrasts in vehicle ownership preferences, the pace of acceleration of shared mobility, regulatory impact, and technological advances.

IHS expects the U.S. to be the first market to deploy autonomous vehicles on a large scale, with the number of units reaching several thousand by the end of this decade.

IHS expects the U.S. to be the first market to deploy autonomous vehicles on a large scale, with the number of units reaching several thousand by the end of this decade. However, while the U.S. will see the strongest pace of growth at the beginning of deployment, China will ultimately have more units in the outer years of the forecast. For instance, IHS pegs the number for China at 5.7 million units sold by 2035, versus 4.5 million in the U.S. “The sheer volume of vehicles expected to be sold there as well as consumer demand for new technologies will drive growth, with more upside possible as regulators assess the potential of autonomous mobility to address safety and environmental concerns,” IHS said in a statement.

Western Europe, according to IHS, will also see significant penetration, with the number of units reaching 3 million in the next two decades. Eastern Europe and the Middle East North Africa region won’t see the same type of numbers but have a lot of upside potential based on new business models and use cases. Meanwhile, Japan and South Korea combined will see more than 1 million units sold through 2035 driven by demographics, an “affinity” for technology, and the motivation of Japanese carmakers to catch up with their peers in the U.S. and Europe.

Challenges to the forecast

While IHS has boosted its forecast for autonomous cars, there remains a number of hurdles.

“We don’t want to minimize the challenges, particularly on the regulatory side,” Carlson told The Fuse. “But we expect them to be addressed over time.”

“We don’t want to minimize the challenges, particularly on the regulatory side.”

Legal frameworks and regulatory issues are key impediments, while technology, though it’s becoming more sophisticated, still needs to be brought to market and scaled up. In the U.S., with tech companies and automakers clamoring to get ahead in the autonomous space, regulation remains the biggest obstacle. A patchwork of 50 different sets of regulations by each state is the nightmare scenario, which would cause uncertainty and confusion for investors and consumers. However, this situation may very well be avoided. Carlson notes that some policymakers and regulators have recognized the safety and environmental benefits of autonomous cars and these early adopters are generally in favor of streamlining regulations in order to make them conducive for wide deployment.

Quicker-than-expected penetration of autonomous vehicles would be good news on a number of fronts, given that they will significantly cut the number of traffic deaths, improve freedom of movement for millions, and hasten the electrification of the automobile fleet.

“The future fleets of driverless vehicles will provide mobility services for anyone and anything, creating exciting and new opportunities for the automotive industry,” Egil Juliussen, director of research at IHS Automotive, said in a statement.

ADD A COMMENT