The race in the autonomous vehicle market is heating up, with a growing number of legacy automakers racing to cement their lane in the AV space.
The details: From robotaxis to new self-driving features, automakers such as GM, Stellantis, Mercedes-Benz, and Volkswagen are moving more aggressively to scale their autonomous vehicle business.
GM has announced it will introduce an “eyes-off, hands-free” autonomous driving system in 2028.
Stellantis has partnered with Uber and Nvidia to expand its autonomous mobility initiatives.
Mercedes-Benz is collaborating with Nvidia on Level-4-ready autonomous vehicles for passenger mobility.
Volkswagen announced plans in April to launch its ID. Buzz autonomous vehicles on the Uber platform beginning in Los Angeles next year.
The U.S. autonomous vehicle (AV) market was valued at $34.6 billion in 2024 and is projected to surge to roughly $307 billion by 2033 at a 27.5% CAGR, per DataM Intelligence.
What they’re saying: “Autonomous vehicles have arrived for both rideshare and trucking,” Goldman Sachs Research analyst Mark Delaney writes in a Goldman Sachs team report. “We believe the key focus for investors is now on the pace at which AVs will grow and how big the market will become, rather than if the technology works.”
Why it matters: Autonomy creates a new service layer (sensor cleaning, calibration, AV validation). Dealers that operationalize this early will be better positioned to capture new annuity-style revenue, while those who wait risk ceding that profit pool entirely.
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Between the lines: Despite the projected growth, legacy automakers could struggle to generate profit from AVs, reports the Financial Times.
Ride-hailing economics are notoriously thin compared to traditional auto margins.
Scaling robotaxis requires major investments at a moment when many automakers are still losing money on EVs.
Partnerships with Uber, Nvidia, and others may help improve margin structures, but the challenges for traditional OEMs and tech giants in the autonomous vehicle market are very different.
“The carmakers need to produce profit and cash whereas the big tech giants need to produce growth. The market is not holding them to the same agenda, which gives the tech giants a much greater advantage to pursue things like robotaxis,” HSBC analyst Mike Tyndall said, per the Financial Times.
Bottom line: The opportunities in the AV market are huge, but whether it becomes profit or just burn will come down to capital discipline, the quality of partners, and how fast automakers can scale their operations in the sector.
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