The headwinds experienced by General Motor’s robotaxi brand Cruise in early 2024 set the general tone for autonomous vehicle (AV) development during the first half of the year. AV culture needed a reassessment, and roadmaps for mass market SAE Level 4 technology became less ambitious as investors lost faith as product delivery repeatedly fell below expectations. AV start-up investment fell from US$2.6bn in Q3 2023 to US$700m in Q1 2024, according to Crunchbase data. More recently, however, money has started to flow back as promising use cases like logistics continue to develop.
Forward-looking automakers are already laying the foundation for advanced autonomy in private passenger cars through partnerships with tech firms. Attaining Level 4 functionality promises to be profitable even if it is more gradual than expected. McKinsey & Co forecasts that Level 4 systems alone could generate revenues of US$170bn-US$230bn by 2035 despite the equipped vehicles representing less than 30% of estimated sales. The potential value is enticing, but who will be the first to unlock it?
