Robo Taxi Market Size, Share, Industry & Opportunities 2030

Report Description

The global robo taxi market size was valued at around USD 1.07 billion in 2021 and is expected to reach USD 36.81 billion by 2030, expanding at a CAGR of around 63.54% during the forecast period, 2022 – 2030. The growth of the market is attributed to the development of the automobile industries around the world and the growing adoption of autonomous vehicles in several emerging countries.

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Robo taxis are autonomous vehicles, which are designed based on self-driving concepts without human operation. Robo taxis are operated through on-demand mobility-controlled services. These taxis are operated through smartphones for short-distance travel and on rental applications for long-distance services. These e-hailing vehicles are fully autonomous and are fuel-efficient. They do not emit carbon while driving and offer eco-friendly solutions. With the introduction of automated vehicles, the engagement of human drivers is no longer required to operate a vehicle. This reduces the risk of dangers and accidents caused by human errors and reduces the operational cost.

These self-driving cars are incorporated and equipped with technological components, such as light detection and ranging (LiDAR), radio detection and ranging (RADAR), cameras, and ultrasonic sensors. The presence of these innovative features results in safe and efficient operation of vehicles. Robo taxis are fitted with an advanced driver assist system, health monitors, airbags, and other comfort and safety solutions that access traffic-related data and automatically record the behavioral patterns of drivers. These driverless vehicles usually have automation of level 5 and level 4. In the automated vehicle industry, the manufacturers mainly rely on NVIDIA DRIVE technology that provide AI compute solutions for deployment, training, development, validation, and testing of robo taxi vehicles. NVIDIA chips encompass the complete data workflows that are required for the stimulation of diverse networks, including software and hardware for safe and secure operation of the vehicles.

The global robotaxi market is registering significant growth in recent years. Rapid urbanization coupled with rising per capita income of people across the world is expected to influence the development of the automobile industry. Rising awareness and consciousness about the environmental pollution caused by conventional vehicles is increasing the demand for autonomous vehicles. The increasing adoption of autonomous vehicles in emerging countries provides opportunities for the expansion of the robo taxi market. Additionally, several governments around the globe are offering incentives, tax benefits, and subsidies to encourage the adoption of these electric vehicles as an alternative solution to traditional OEMs. Furthermore, increasing need for fuel-efficient automobiles, sustainable means of transportation, growing need for road safety, and rising requirements for traffic control and pollution creates the scope for robo taxis market globally. Conversely, the requirement of high investment, growing cybersecurity concerns, and sophisticated design of robo taxis are some of the factors that pose challenges and limit the expansion of the industry. Rising robotic support systems in vehicles reduces the chances of accidents, which boosts the global robo taxi market. Robo taxis are increasingly used for the transportation of goods and passengers.

COVID-19 IMPACT

The emergence of COVID-19 had a negative impact on the global robo taxi market. The enforcement of lockdowns and restrictions on social movements for several months led to the temporarily shutdown of almost all the manufacturing units around the world. This resulted in the decreasing production and sales of autonomous vehicles. Additionally, OEMs and the manufacturing units had to wait until the ease of the lockdown to resume production, which affected the economy. Suspension in the operations of manufacturing units and decline in the demand for autonomous vehicles pose challenges to the market growth. The economic downturn in business activities and suspension of the testing and analysis of self-driving vehicles had a negative impact on the robo taxi market. Moreover, the companies reduced their investments and considered cost-cutting strategies to sustain their business. For instance, in May 2020, as a part of a cost-cutting initiative on account of lack of funds and investments, Uber India laid off 600 employees during the pandemic.

Market Dynamics

The robo taxi market report presents a complete overview of market dynamics by focusing on the current market trends, existing drivers, growth opportunities, and emerging challenges that can shape the outcome or overall performance of the market during the forecast period, 2022 to 2030.

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Major Trends:

Increasing adoption of fuel-efficient and emission-free vehicles is a current market trend in the global automotive industry

The increasing adoption of fuel-efficient and emission-free vehicles is a current market trend in the global automotive industry. Stringent norms by governments encourage the usage of fuel-efficient vehicles as a solution towards environmental protection and conservation, leading to high demand for autonomous vehicles. The rising adoption of electric-based autonomous vehicles is anticipated to eliminate carbon emissions as well as reduce traffic congestion and pollution.

Adoption of robotic assistance in delivery services is a major trend in the market

The extensive adoption of robo taxi services for the transportation of goods and delivery services is a major trend in the global market.

Key Drivers:

Increasing concerns regarding road safety and traffic congestion are fueling the robo taxi market

Road accidents and crashes, due to human error, have been the key causes of death and disabilities across the globe. Factors such as distracted driving, high speed, use of mobile phones while driving, driving under the influence of drinking alcohol or drugs, and others have increased the risk of road accidents. Rising cases of road accidents is increasing the demand for road safety measures, which in turn, is raising the demand for driverless autonomous vehicles. As per Waymo LLC’s record, approximately 1.4 million people lose their lives annually, due to road accidents. According to the National Highway Traffic Safety Administration (NHTSA), 94% of car accidents occur annually, owing to human error. Automated robo taxis are incorporated with both short-range sensors and long-range sensors that detect any nearby object or obstacle on the road and eliminate the risk of accidents. High concerns over road safety fuel the demand for driverless automated vehicles, which in turn, drives the global robo taxi market.

Robo taxis reduce traffic congestion by controlling and maintaining speed within the congested traffic and reduce fuel consumption. As a result, robo taxis gained significant popularity coupled with the benefits of their usage in terms of road safety and traffic control.

Integration of the advanced driver assistance system is propelling the robo taxi market

The increased installation of the Advanced Driver Assistance System (ADAS) technology in autonomous vehicles is anticipated to drive the market. ADAS consists of various active and passive technologies such as adaptive cruise control, autonomous emergency braking, park assist, blind-spot recognition, and lane departure warning. The integration of ADAS in most automated vehicles offers many advantages in terms of safety, convenience, and efficiency to the drivers as well as passengers. Moreover, ultrasonic sensors, software, cameras, and other features enhance the applicability of ADAS and aid in reducing traffic-related deaths. The integration of ADAS in mid-sized and entry-level vehicles, along with safety and high-efficiency features, is mandatory in all the automobile manufacturing industries as directed by government laws for safety purposes. For instance, in 2018, the government of India announced its plan to integrate advanced driver assistance system applications in all vehicles by 2022 for safe transportation by road. Thus, integration of the advanced driver assistance system application in autonomous vehicles such as robo taxis is expected to drive the robo taxi market.

Existing Challenges:

High investment poses certain limitations to the robo taxi market

A full-fledged robo taxi requires more than 40 sensors, including cameras, software, and ultrasonic sensors for efficient operation of the vehicle. These technologically advanced sensors, particularly Lidar, ultrasonic sensors, and cameras are expensive. For instance, automotive Lidar is priced up to USD 50,000. Additionally, the adoption of advanced features and fleet management in robo taxis is a time-consuming and complex process, as most of these vehicles are in the developmental phase and few level 5 and level 4 vehicles are available for analyzing and testing in 2021. The increasing requirement for huge investments in research and development and the high cost of vehicle deployment in the autonomous vehicle market poses challenges to the key manufacturers, thus restraining the market.

Difficulties of navigation under challenging conditions are limiting the market potential

Robo taxis function accurately most of the time; however, some challenges still exist in the market. Crowded places pose major challenges to the proper functioning of autonomous vehicles. Robo taxis are expected to wait for a pedestrian to cross the road until the traffic signals turn green. However, jaywalking creates a challenging situation for the operation of robo taxis. Additionally, these autonomous vehicles are expected to face difficulties while operating under extreme conditions such as failure of traffic signal, heavy traffic, heavy rain, fog, and snow. These complexities in the functioning of robo taxis are limiting the market potential for robo taxis.

Emerging Opportunities:

Increasing governmental support and favorable initiatives provide growth opportunities in the global robo taxi market

Several governments took initiatives to deploy autonomous vehicles, due to their safety and efficient functioning. Relaxation on the testing of self-driving vehicles boosted the use of automated vehicles. For instance, the Ministry of Transport and Communications in Finland announced legislations for testing automatic driving vehicles. The governments in the US, UK, France, Austria, and the Netherlands also undertook the same initiative. In 2020, the California Public Utilities Commission (CPUC) launched two commercial programs that aid companies in testing their robo taxis for commercial ride-hailing services. Increasing governmental support and favorable initiatives provide growth opportunities in the global robo taxi market.

Growing number of self-driving vehicle fleets creates opportunities in the market

Several manufacturing companies are increasingly providing an extensive testing fleet of robo taxis. For instance, Cruise Automation offers a taxi fleet such as 46 Chevrolet Bolt EVs. NuTonomy has asix Mitsubishi i-MiEVs and modified Renault Zoe in Singapore. Uber offer s14 vehicles. Baidu Inc. possesses a fleet of 30 sedans in Guangzhou, China. The growing number of self-driving vehicle fleets is expected to create opportunities in the global robo taxi market.

Scope of the Report

The report on the global robo taxi market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Market Segment Insights

Car rental segment is dominating the market

On the basis of services, the global robo taxi market is segmented into car rental and station-based. The car rental segment is dominating the market, owing to the increasing demand for e-hailing sharing rides among passengers. China and other countries have already begun testing self-driving taxis and plan to introduce taxis in major cities. Moreover, cab companies, such as Uber, are investing in rental robo taxi services to minimize the operating costs incurred by human drivers. Furthermore, the development of global Transportation-as-a-Service (TaaS) is creating opportunities for robo taxis in the car rental services sector.

Lidar segment accounts for a major market share in 2021

Based on the components, the global robo taxi market is divided into radar, lidar, camera, and ultrasonic sensor. The lidar segment accounts for a major market share in 2021 and is projected to expand at a high CAGR during the forecast period. Lidar sensors play a vital role in autonomous vehicles. Lidar technology enables HD maps for autonomous vehicles and 3D view of their surroundings by measuring millions of data points in real-time and determining the distance between two vehicles for safe navigation. Velodyne Lidar Inc is a key 3d lidar technology company with over 450 customers around the world. Growing investments and funding in lidar startups drive the segment. The increasing adoption of high-tech advanced sensors is propelling the market.

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Level 4 segment is dominating the market in 2021

On the basis of the level of autonomy, the global robo taxi market is bifurcated into level 5 and level 4. The level 4 segment is dominating the market in 2021. Robo taxis with level 4 automation operate on limited routes. In level 4 automation, a cockpit is fitted for manual vehicle control. Robo taxis with level 4 automation are increasingly demanded in the global market, as it reduces the operational cost of fleet management by 30% to 50%. The level 5 automation segment is anticipated to register a high market share during the forecast period, due to its fully automated services. It functions efficiently in extreme conditions such as bad weather, and traffic congestion.

Electric vehicle segment registered robust growth in 2021

Based on propulsion, the global robo taxi market is divided into hybrid vehicles, electric vehicles, and fuel cell vehicles. The electric vehicle segment registered robust growth in 2021 and is expected to lead the market during the forecast period, 2022-2030. Use of fully electric vehicles leads to zero emissions of carbon, hence it is a sustainable solution to the environment. Additionally, the presence of a low number of vehicle components in electric vehicles reduces the maintenance and operational cost of these vehicles. Rising awareness of the benefits of these vehicles in terms of sustainability and energy-efficient services is driving the segment. Electric vehicles have gained significant popularity among consumers. Growth of this segment is attributed to the government regulations imposed on the adoption of these vehicles with carbon-free emissions. For instance, the partnership between Volvo Cars and Baidu Tech to develop fully-electric robo taxis for China is a step towards developing eco-friendly transport solutions.

The hybrid segment is projected to register decent growth during the forecast period. Major OEMs around the world are increasingly focusing on developing advanced infrastructure for hybrid electric vehicles.

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Passenger transportation segment accounted for high market revenue in 2021

On the basis of applications, the global robo taxi market is bifurcated into passenger transportation and goods transportation. The passenger transportation segment accounted for high market revenue in 2021 and is expected to expand at a high CAGR during the forecast period, owing to the extensive adoption of autonomous vehicles for passenger transportation. Rising concerns over road safety, traffic congestion, and environmental pollution led to increasing demand for automated passenger vehicles. Additionally, automatic driverless vehicles provide safe and convenient ride-sharing services, which is driving the market.

Market in North America to grow rapidly

In terms of regions, the global robo taxi market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. The market in North America is growing rapidly. This is attributed to the increased demand for car rental services for passenger transportation as well as goods transportation in the region. Additionally, the increasing investment in autonomous vehicle startups coupled with partnerships and collaborations among various manufacturers and car servicing companies are likely to boost the market in this region. For instance, Tesla CEO, Elon Musk, announced the launch of 1 million robo taxis by 2020, which is expected to propel the market in the region.

The market in Asia Pacific is growing gradually. Asia Pacific is projected to account for high market revenue during the forecast period, 2022-2030. The growth of the market in Asia Pacific is attributed to the rising concerns over road safety and increasing automotive fleet. Surging investments in autonomous vehicle technology in the region are likely to drive the market in this region.

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