Autonomous vehicles to drive half of kilometres travelled in EU by 2030

By 2030, almost half of all kilometres in the EU are set to be driven by autonomous vehicles. The landmark figure will likely also be reached in the US and China by the same year, despite self-driving transport representing just a quarter of all vehicles on the road.

The transformation of the automotive industry is set to see considerable shifts in the way in which revenue is generated. Autonomous vehicles, in particular, have the potential to shift ownership models, along with shifting insurance risk and transforming the arena as such when it comes to driving. A new report from Strategy&, PwC’s strategy consulting arm, titled ‘The 2017 Strategy& Digital Auto Report’, explores the phenomenon of autonomous vehicles and the effect they may have on the wider business models of the automotive industry. The report is based on 50 interviews with worldwide managers of automotive manufacturers and suppliers, academics, and analysts.

Autonomous vehicle technology is rapidly developing, although the report does not expect fully-autonomous vehicles to become publicly available until after 2025. Lower levels of automation are likely to pervade in the years up till 2025, largely focused on safety features and drive-assist features. By 2025, more sophisticated autonomous vehicles are expected to hit the road, including a wider range of level 1-3 autonomous modes.

By 2030 however, high- and fully-autonomous vehicles (level 4 & 5) will likely have public access, with the number of new car sales in the category reaching around 30 million of the 82 million vehicle sales expected across China, the EU and the US. In total around 81 million vehicles on the road will be level 4 and 5 by 2030 – relatively evenly distributed across the three countries.

Utilisation rates

One significant change arising from the automation of the vehicle fleet is related to ownership models. The focus on personally owned driver-driven vehicles is projected to shift, initially affected by an increase in vehicle-sharing models, before, in around 2025, an increase in personally owned and shared autonomous vehicles takes hold.

The percentage of shared autonomous vehicle "total person km driven" is set to rise relatively starkly in all three regions considered. The tally is expected to reach 26% in the EU, while in the US and China figures come in at 25% and 37% respectively.

The firm’s projection sees the number of total kilometres travelled by car increase in the years to 2030, topping out at 11.7 trillion kilometres in the EU and US, while Chinese drivers (or robots) will clock 8.6 trillion. Autonomous vehicles are set to clock around half of the kilometres travelled across the regions, reflecting, with bases of around only 15% of vehicles on the road, their relative higher utilisation rates over more traditional vehicle types. The firm notes that the psychological importance of car ownership will continue to see personally owned vehicle sales of autonomous vehicles stay relatively robust.

Market size

The market size for mobility related services is expected to enjoy healthy long-term CAGR in all three regions. The relative size of the Chinese market, coupled with economies of scale, are likely to see the country become the biggest market by 2030, hitting $564 billion, although the growth spurt is projected towards the end of the 2020s. The markets in the US and EU have similar profiles, although the EU is set to see stronger overall growth over the period, at 25% compared to 19% for the US.

Commenting on the research, Richard Viereckl, Managing Director at Strategy& and co-author of the study, said, “Shareholders expect a clear strategy for how the car manufacturers are going to handle the transformation from the current hybrid status to clearly-differentiated mobility business areas. Owing to the far more frequent and more direct customer contact in future, the car sector needs a significantly more customer-centered approach, not least when it comes to research, and it needs to be looking to strategic partnerships with technology firms when developing digital services.”