The potential of autonomous vehicles (AVs) to expand throughout all forms of future mobility makes them “the next economic driving force”, according to a new report.

GlobalData’s Autonomous Vehicles report outlines that level 4 and 5 AVs – those that do not require a human driver – will unlock new business models for ride-hailing, robotaxis, freight logistics, mobile retail and services brought directly to consumers. The significance of this, it asserts, has triggered a “geopolitical race” to become the first country or region to secure a mature AV infrastructure.

“The automotive industry, in its entirety, accounts for a considerable proportion of economic activity in the world’s most developed markets,” the report states. “In the last century, this was driven primarily by vehicle manufacturing and, more recently, electric vehicle and battery production. However, the first region to secure a mature AV infrastructure would gain a huge competitive advantage, with global leadership in the automotive industry at stake.”

US and China leading in AVs

Regional sales forecast for Level 4+ shared autonomous vehicles

The report contends that AVs will be “one of the biggest tech races between economic superpowers” and adds that China and the US are already leading the way. It forecasts that China will account for a little over 200,000 annual sales of level 4+ AVs by 2030 and North America around half of that. Europe is expected to be outpaced by the rest of the world at that point.

By 2040, however, Europe is expected to see sales of over 800,000 with the rest of the world closer to 650,000. China is forecast to be achieving sales of over 1.6 million at that point, with the US in the region of 1.2 million.

China’s expected dominance is linked to its over-arching goal of leading the Fourth Industrial Revolution. A pillar of that is the Made in China 2025 initiative, which was launched in 2015 and is aimed at transforming the country from a manufacturing base for low-cost goods to the global leader in high-tech industries.

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“China’s AV sector is experiencing significant growth, both on its own and compared to other markets,” the report explains. “A key objective of the ‘Made in China 2025’ initiative is to position China as a leading player in the global automotive market by 2025, overcoming its previous lag in the internal combustion engine era and the initial stages of vehicle autonomy Levels 2 and 3.

“The Chinese aim is to surpass global markets by investing heavily in R&D and testing opportunities, targeting the transition to Battery Electric Vehicles (BEVs) and Level 4 and 5 autonomous driving as pivotal moments for advancement.”

China’s progress to date has been driven to a large extent by significant government investment and support for research, which have catalysed development, boosted electric vehicle (EV) sales and market shares and helped to shape positive consumer attitudes towards AVs.

“Chinese car manufacturers saw the movement to electric vehicles as an inflection point in the automotive industry and have a growing global market share following expansions from BYD, Chery, SAIC, and others,” the report says. “As they become established global brands, Chinese EV manufacturers will push to compete on autonomous driving technology over the next 12-24 months.”