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The Road Ahead for Autonomous Vehicles

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The Road Ahead for Autonomous Vehicles

The March 2018 pedestrian fatality by an Uber autonomous test vehicle highlights both the significant technical challenges and limitations associated with this transformative technology as well as the many practical, technical, legal and moral questions requiring resolution prior to the mass adoption of driverless, autonomous vehicles (AVs), still decades away. Full-scale testing of self-driving vehicles without human control—including tractor trailers--is underway in cities globally by a number of companies, and clearly, how people travel has been changing because of rideshare offerings from transport network companies (TNCs) like Uber, Lyft and soon perhaps Waymo. And with the commercial rollout of "hands-free" features on some premium autos this year, the early stages of a transition to autonomous vehicles is underway.

That said, we believe AV penetration will significantly lag that of electric vehicles (EVs) and the variance between our different AV disruption scenarios discussed in this report is very large: our low disruption scenario only foresees advanced AVs (level 4 and 5) with a 2% share of light vehicle sales by 2030 rising to 10% by 2040. However, should the revolution follow our high disruption scenario where AVs comprise a 30% share of light vehicle sales by 2030 and 50% by 2040, the effects on society will be profound and far-reaching. Semi-automated to fully autonomous all electric-vehicles sharing the road – augmented by ride-sharing technologies and TNCs – are likely to alter how cities are designed, grow, and function, affecting where we live and work. AVs will introduce life-saving and ultimately laborsaving technologies while fundamentally altering the movement of people and goods disrupting business models along the way.

In this report, we present our range of estimates of when AVs will arrive, highlight how mobility technology could develop, and how it will change the landscape of infrastructure needs and other sectors over the long term, principally from a U.S. perspective. We intend to use this background commentary as the basis for our next commentary, which will address the potential credit impact on transportation infrastructure assets of these technological advances.

Key Takeaways

  • Growth of fully autonomous vehicles will be influenced by and significantly lag the market growth of electric vehicles, which could approach a 10% share of U.S. light vehicle sales by 2025 (compared to 1.1% today), behind our forecast 25% share in Europe and 20% share in China.
  • Under our low disruption scenario advanced autonomous vehicles requiring minimal to no driver intervention could reach a 2% share of light vehicle sales by 2030 rising to 10% by 2040.
  • The trajectory of autonomous vehicle growth is complex and unpredictable as it faces hurdles beyond technology and cost.
  • If autonomous vehicles and related technology mobility advances develop incrementally and linearly with current industry participants leading the way, we anticipate fewer positive or negative credit implications. However, newer entrants into mobility technology could disrupt a gradual, evolutionary scenario and negatively affect credit quality across various sectors involving transportation infrastructure and supporting funding mechanisms.