Autonomous Car Sales Will Hit 21 Million by 2035, IHS Says

Tesla Introduces Self-Driving Features With Software Upgrade
A member of the media test drives a Tesla Motors Inc. Model S car equipped with Autopilot in Palo Alto, California, U.S., on Wednesday, Oct. 14, 2015. Tesla Motors Inc. will begin rolling out the first version of its highly anticipated "autopilot" features to owners of its all-electric Model S sedan Thursday. Autopilot is a step toward the vision of autonomous or self-driving cars, and includes features like automatic lane changing and the ability of the Model S to parallel park for you. Photographer: David Paul Morris/Bloomberg via Getty Images
Photograph by David Paul Morris — Bloomberg via Getty Images

United States will be an early leader in deploying autonomous vehicle technology, an effort that will eventually help put nearly 21 million self-driving cars on the world’s roads by 2035, IHS Automotive predicts in a report released Tuesday.

The forecast, which is much higher than previous estimates, is influenced by recent research and development by major automakers, suppliers, and tech companies as well as regulatory changes and a wave of investments, according to IHS Automotive, a division of IHS Inc.

The research firm even sees the 2020 Summer Olympics as a driving factor towards wide deployment of autonomous vehicles. The research firm says while the U.S. leads the world in initial deployment, Japan will be responsible for ramping up industry coordination and investment ahead of the Summer Olympics in Tokyo in 2020. Deployment in the U.S. will begin with several thousand autonomous vehicles in 2020, which will grow to nearly 4.5 million vehicles by 2035, according to IHS Automotive forecasts.

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“Global sales of autonomous vehicles will reach nearly 600,000 units in 2025,” Egil Juliussen, director of research at IHS Automotive, said in a statement. The new forecast reflects a 43% compound annual growth rate between 2025 and 2035, he said.

The IHS analysis took into account the increasing investment by automakers and other companies into autonomy, car-sharing and ride-sharing programs, and research and development centers.

While 21 million self-driving cars sounds like a lot, consider that global sales of traditional vehicle sales hit 82.9 million last year. Toyota, on its own, sold more than 10 million vehicles last year.

Automakers and tech companies are in a race to develop self-driving cars and the services—like ride-sharing—that could expand exponentially with the technology.

In the past six months, a number of automakers have announced investments and strategic partnerships with ride-sharing companies like Lyft, Uber, and China rival Didi Chuxing.

In May, Toyota and Uber announced they had entered into a “memorandum of understanding to explore collaboration, starting with trials, in the world of ridesharing in countries where ride-sharing is expanding,” Toyota Financial Services Corporation, a subsidiary of Toyota, and Mirai Creation Investment Limited Partnership, is also investing an undisclosed amount in Uber, the companies said.

The news followed Volkswagen’s announcement that it had invested $300 million in Israeli startup Gett, a service that ferries passengers in taxis and black cars in 60 cities worldwide. Earlier this year, GM invested $500 million in Lyft and announced a partnership aimed at eventually deploying fleets of self-driving taxis.

Ford just tested a self-driving car at night. Watch:

General Motors also paid more than $1 billion in cash and stock for Cruise Automation, a San Francisco-based developer of autonomous vehicle technology.

Then there are the tech companies like Apple (AAPL), which is widely believed to be working on a car, and Google (GOOGL), which is publicly testing its self-driving vehicles in Mountain View, Calif., Austin, Phoenix, and Kirkland, Wash. Google wants to commercialize its self-driving car technology by 2020. Last month, Google said it was collaborating with Fiat Chrysler Automobiles (FCAU) to put a fleet of self-driving minivans on the road, marking the first time the tech company has worked directly with an automaker to create its autonomous vehicles.

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