Autonomous (Driverless) Cars Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Global Autonomous (Driverless) Cars Market Trends and Insights

Rapid Expansion of Robo-Taxi Pilots across Asian Mega-Cities

In late 2024, Baidu's Apollo Go achieved a significant milestone with millions of cumulative rides across multiple cities in China. Meanwhile, Waymo was recording a substantial number of paid rides weekly in both Phoenix and San Francisco. In April 2025, Tokyo revised its Road Traffic Act, paving the way for Level 4 operations in specific districts. This move prompted automotive giants Toyota and Nissan to hasten their pilot schedules. Waymo's unit economics are on the upswing, with the company's average ride cost dropping to a competitive level. Concurrently, Baidu celebrated achieving positive contribution margins in Wuhan by the end of 2024. Furthermore, municipalities in the region are more amenable to issuing commercial licenses than their Western counterparts, resulting in a notable near-term growth boost.

Government Mandates for ADAS-Centric Safety Regulations in the EU and China

The European Union enforced Regulation 2019/2144 in July 2024, obligating all new passenger vehicles to include autonomous emergency braking, intelligent speed assistance, lane-keeping assist, and driver monitoring systems ^{[1]“General Vehicle Safety,” Regulation (EU) 2019/2144, eur-lex. europa.eu} . China released GB/T 40429-2021 and granted multiple Level 3 permits in Beijing and Shenzhen during 2024, setting hands-free highway operation as an attainable near-term goal ^{[2]“GB/T 40429-2021 Intelligent Connected Vehicle Standard,” Ministry of Industry and Information Technology, miit.gov.cn} . Japan, South Korea, and ASEAN states have adopted UN Regulation 157, creating a contiguous regulatory pull across Asia. The shared compliance calendar increases volume for advanced sensors, reduces per-unit cost, and shortens payback periods for automakers that invest in Level 3 systems. 

Falling LiDAR and AI Compute Costs Unlocking Mass-Market Level 3 Launches

Hesai AT128 LiDAR modules are now available at a significantly lower cost in high volumes. NVIDIA's Thor SoC is expected to deliver substantial processing power while maintaining energy efficiency in the near future ^{[3]“Thor Centralized Car Computer,” NVIDIA Corporation, nvidia.com} . In 2024, Mercedes-Benz introduced its Drive Pilot Level 3 in Nevada and California, accompanied by an annual subscription fee. These advancements in cost and performance enable mid-tier sedans and SUVs to incorporate conditional automation without encountering thermal or pricing barriers. This overall progress is expected to contribute significantly to the forecasted CAGR during the medium term.

5G-V2X Corridor Roll-Outs in North American Freight Networks

The United States National V2X Deployment Plan designates a significant investment for roadside units on major freight routes, beginning with projects in Texas and Arizona. Aurora Innovation and Kodiak Robotics are piloting autonomous Class 8 trucks on these routes, demonstrating notable fuel savings through platooning. As coverage expands, fleet operators benefit from data feeds that enhance route planning and safety, driving considerable growth in the medium term.

Patchwork State-Level AV Regulations in the United States Delay Commercial Scale

There is no single federal framework governing autonomous vehicles in the United States; therefore, companies must navigate unique rules in each state. California revoked Cruise permits after a pedestrian-dragging event, and Arizona limited commercial services in certain municipalities. This fragmentation leads to duplicative compliance programs and slows interstate freight automation, resulting in a few percentage points of reduced near-term growth.

Public Mistrust Intensified by High-Profile Robotaxi Incidents

Following an incident in San Francisco in late 2023, Cruise suspended its nationwide services. In the following year, Baidu experienced temporary shutdowns in Wuhan, and Pony.ai paused its rides in Guangzhou for a brief period. These events, coupled with heightened media scrutiny and backlash on social media, have made regulators more cautious. Due to the reputational damage, there is an anticipated short-term decline in growth until transparency campaigns and safety audits can restore public trust.

Segment Analysis

By Level of Automation: Rising Level 5 Activity Underlines the Shift to Higher Autonomy

Level 1 driver assistance captured 43.47% of the autonomous (driverless) cars market share in 2025. The segment benefits from mandatory features, such as autonomous emergency braking and lane-keeping assist, which are now standard in entry trims across Europe and China. Level 3 conditional automation is being scaled in premium models following regulatory approvals in Nevada, California, Germany, and Japan. Mercedes-Benz logged 2 million miles on Drive Pilot during 2024, and BMW plans to deploy Highway Assistant in 2026. The segment transition indicates hardware commoditization and the monetization of subscription software.

Level 5 full automation is projected to grow at a 24.39% CAGR through 2031, as robo-taxi fleets in Wuhan, Phoenix, and Tokyo enlarge service areas. The autonomous (driverless) cars market observes operators amortizing sensor suites across high daily utilization, turning fixed assets into revenue generators for up to 18 hours per day. Level 4 deployments in middle-mile freight and shuttle services demonstrate commercial viability in geo-fenced zones. Subscription models in Level 3 vehicles signal recurring revenue potential, while Level 5 fleets redefine the economics of urban mobility.

Note: Segment shares of all individual segments available upon report purchase

By Vehicle Type: SUV Real Estate Meets Hatchback Scalability

SUVs and MPVs held 78.81% of the autonomous (driverless) cars market share in 2025 because their larger rooflines and front fascias can comfortably house LiDAR, radar, and camera arrays without aesthetic trade-offs. Waymo’s Jaguar I-PACE and Baidu’s Apollo Moon rely on sport-utility form factors for roomy sensor placement. The autonomous (driverless) cars market will retain SUV dominance, where passenger capacity and sensor heat dissipation are key considerations.

Hatchbacks are forecast to expand at a 25.11% CAGR to 2031 as solid-state LiDAR shrinks below 10 centimeters and compute units fit under compact dashboards. Automakers can bring autonomy to high-volume B-segment platforms, and dense Asian cities favor compact dimensions for easier access to the curb. Sedans remain relevant where long-range aerodynamics and battery efficiency are essential, as seen in the Tesla Model S and Lucid Air deployments.

By Propulsion Type: BEV Electrical Headroom Gains Momentum

Internal combustion engine models commanded 66.37% of the autonomous (driverless) cars market share in 2025 after manufacturers retrofitted existing platforms with Level 1 and Level 2 features. Yet battery electric vehicles carry surplus electrical capacity that easily powers multi-sensor suites. The autonomous (driverless) cars market size for BEVs is set to accelerate at a 25.01% CAGR through 2031, aided by simplified drive-by-wire architectures. ICE trucks keep a share in long-haul segments until battery energy density and megawatt charging mature.

Hybrid electric vehicles provide interim solutions. However, limited electrical headroom restricts advanced computing, keeping most hybrids at Level 2 capability. BEVs also enable quieter cabins, which boosts robo-taxi passenger comfort and lowers lifecycle maintenance costs by eliminating oil changes and reducing brake wear.

By Mobility Form: Ownership Preference Faces Robo-Taxi Economics

Personal ownership contributed 74.35% of the autonomous (driverless) cars market share in 2025 as consumers valued customization and immediate availability. Manufacturers monetized autonomy through subscriptions, such as Tesla's Full Self-Driving at USD 199 per month and Mercedes-Benz's Drive Pilot at USD 2,500 annually. The autonomous (driverless) cars market anticipates continued owner uptake where suburban lifestyles and low public transit density prevail.

Shared mobility is forecast to grow at a 25.13% CAGR through 2031 due to strengthening unit economics. Waymo rides in Phoenix already approach ride-hail parity, and Baidu Apollo Go recorded profitability in Wuhan. High utilization spreads capital cost across many revenue miles, enabling fares to fall further. Autonomous shuttles in retirement communities and industrial parks support specialized use cases.

By Component: Hardware Commoditization Shifts Value Toward Software

Hardware represented 55.57% of the autonomous (driverless) cars market share in 2025. LiDAR pricing fell sharply, with Luminar Iris at USD 1,000 and Hesai AT128 below USD 500, signaling ongoing commoditization. Radar modules now cost USD 50-100, and compute modules, such as Mobileye's EyeQ6 Lite, run near USD 200. The autonomous (driverless) cars market size for software is projected to grow rapidly, with a robust CAGR of 25.07% through 2031, as perception, mapping, and planning algorithms can be updated over-the-air.

Waymo demonstrates exceptional accuracy in detecting pedestrians from a significant distance. Meanwhile, Mobileye leverages an extensive network, sourcing mapping data from a vast number of vehicles to refresh road updates almost instantaneously. Additionally, services like sensor calibration and remote operations are increasingly serving as a crucial link, seamlessly connecting hardware integration with algorithm deployment.

Geography Analysis

North America generated 38.71% of the autonomous (driverless) cars market share in 2025. Waymo operated more than a lakh weekly rides across four United States cities, and Tesla enrolled multiple vehicles in supervised Full Self-Driving. Regulatory fragmentation remains a hurdle after California revoked Cruise's permits; however, federal spending on V2X roadside units supports autonomous freight deployment on interstate corridors. Canada allows Level 4 testing without safety drivers in Ontario and Quebec, but its smaller addressable fleet tempers near-term volume.

Asia Pacific is projected to register a 25.05% CAGR through 2031. Baidu Apollo Go crossed the 6 million ride milestone, and Pony.ai plus AutoX expanded fleets in Beijing, Guangzhou, and Shenzhen. Japan’s Road Traffic Act revision allows Level 4 vehicles inside geo-fenced districts, enabling Toyota pilots in Tokyo’s Odaiba and Nissan trials in Yokohama. India remains nascent until HD mapping density improves and a clear regulatory framework emerges, while South Korea grants Level 4 permits for autonomous buses on dedicated lanes in Sejong City.

Europe benefits from the General Safety Regulation that mandates Level 2 features as standard. Mercedes-Benz launched Drive Pilot in Germany in 2024, followed by Nevada and California. BMW targets a Level 3 rollout by 2026. Fleet decarbonization rules are accelerating autonomous electric trucking. Einride has deployed 200 driverless trucks across Germany, the Netherlands, and Sweden, while Volvo introduced the Vera system for port shuttles. South America and the Middle East pilot niche services, yet sparse HD maps and evolving rules delay broader scale.