Research & Discoveries: "Autonomous driving’s future: Convenient and connected" from McKinsey & Company

Autonomous vehicles (AVs) are powered by rigorous research and millions of hours of technological advancement and innovation. In addition to the research to build AVs, academics and experts around the world are studying how AVs can improve safety, enhance mobility, and create new economic opportunities, among other transformative benefits. To keep up with it all, AVIA is launching our Research & Discoveries (R&D) Series to highlight these reports’ conclusions about AVs.   

Need to Know (NTK): Autonomous driving could revolutionize mobility and reduce car collisions. American consumers are highly interested in autonomous driving. 

McKinsey & Company released a new analysis of the AV sector’s “private-passenger-car segment”, which could represent a $185-255 billion value proposition by 2035. Their conclusions focus on potential outcomes of widespread deployment and what will be required to fully realize a future where passenger-car AVs are broadly available.

Among the core upsides to autonomous passenger cars becoming ubiquitous on public roadways are the wide-ranging beneficiaries. According to McKinsey, numerous stakeholders – including manufacturers, consumers, specific community groups and employees broadly – stand to benefit from AVs’ making the driving experience “safer, more convenient and more enjoyable.” 

The study highlights AV use cases that will help transform work culture, produce productivity gains, and improve transportation benefits for those traveling on public roadways. These include: 

• “For employees with long commutes, driving an AV might increase worker productivity and even shorten the workday.”

• “[Workers] could more easily move farther away from the office, which, in turn, could attract more people to rural areas and suburbs.”

• “[Autonomous driving] might also improve mobility for elderly drivers, providing them with mobility options that go beyond public transportation or car-sharing services.”

Among the general public, as driver-assist features become more commonplace, McKinsey noted that those interested in driver-assist technology-equipped cars are also increasingly likely to be interested in purchasing an AV in the future. Given these interest levels, McKinsey projects “enormous potential for growth” for automakers delivering AVs. 

McKinsey quantifies the value proposition as creating $300 - $400 billion by 2035 for just the passenger car market alone. This estimate represents a notable opportunity for revenue growth on its own; when coupled with McKinsey’s findings that costs for “sensors and high-performance computers are decreasing” barriers to investment will decline and net profits will rise.

Policy Frameworks Are a Prerequisite to Realizing AVs’ Full Potential

The study stresses the importance of support from regulators to overcome AV “safety concerns, creating a trusted and safe ecosystem, and implementing global standards.” McKinsey recognizes that “the development of global AD standards for private-passenger vehicles is clearly in motion,” but to fully realize these wide-ranging benefits policymakers must develop and adhere to a global standard. 

Conclusion

The study concludes that new autonomous technologies have “tremendous potential to provide new levels of safety and convenience for consumers, generate significant value within the auto industry, and transform how people travel.” The study provides advice for industry participants navigating the shifting landscape, such as a targeted value proposition and clear vision for where the market is heading.