Why autonomous vehicles are a wild card for the global vehicle market

Robotaxis could have huge implications for size and distribution of passenger vehicle fleet

The interior of a Hyundai Motor Ioniq 5 electric vehicle automotive robo-taxi. Depending on the region in which they operate, robotaxis can cover three to five times the annual distance of a private pShow more

Electric vehicles and batteries are becoming central to many countries’ industrial policies, and competition to attract investment is bound to increase in the years to come, according to BloombergNEF's annual Electric Vehicle Outlook.

There are many attention-grabbing numbers in the analysis, ranging from how road transport emissions peak in 2029, to how EVs of all types are already displacing 1.5 million barrels of oil a day.

“The substantial shifts outlined in the report will upset many industry incumbents, while also create a host of new opportunities,” Colin McKerracher, lead author of Electric Vehicle Outlook, said.

In BNEF's economics-based modelling – which it called Economic Transition Scenario – the cumulative value of EV sales across all segments hits $8.8 trillion dollars by 2030 and $57 trillion by 2050.

In a scenario in which all vehicles have zero tailpipe emissions by 2050 – its Net-Zero Scenario – the midcentury figure jumps to more than $88 trillion.

The gap between BNEF's Economic Transition Scenario and the Net Zero Scenario is smaller than in any of its previous reports.

This is due to new stronger policy support in the US, early EV progress in a few emerging economies, growing global investment in charging infrastructure and the battery supply chain, and technology innovations like sodium-ion batteries. However, there are still areas where more work is required.

How vehicles are used can significantly affect how many are required on the roads. In this respect, autonomous vehicles, or AVs, are still a wild card for the global vehicle market.

AVs drove over 80 million kilometres on public roads in 2022 in testing and operations. Fleet operators such as Cruise, Waymo and Baidu are expanding services to new cities.

While the current footprint of these services is still relatively tiny, the roll-out of robotaxis could have huge implications for the size and distribution of the passenger vehicle fleet.

Due to the uncertainty around the speed of AV deployment, BNEF modelled out two scenarios in which the timeline of AV adoption varies significantly from its Economic Transition Scenario.

Depending on the region in which they operate, robotaxis can cover three to five times the annual distance of a private passenger vehicle, meaning that in a high-AV adoption scenario, far fewer vehicles are required to offer the same level of mobility to consumers.

In its high-AV scenario, the 2050 fleet of passenger vehicles on the road would be 29 per cent smaller than in its Economic Transition Scenario, which assumes that robotaxis will offer short- to mid-distance mobility mainly in urban areas, where population density bolsters the viability of these services.

In its low-AV scenario, on the other hand, the passenger vehicle fleet will continue to grow out to 2050, ending up at about 1.8 billion vehicles, more than 29 per cent greater than in its Economic Transition Scenario.

There is no doubt electrification will play a defining role in the next few decades of road transport. However, there are still many unanswered questions on the details, such as where and in what segments EVs take hold.

How quickly robotaxis materialise is one of the more uncertain factors that will loom large over investment decisions at all levels of the transport value chain.