Current generation AV tech could achieve more, says Oxbotica

In a January 2023 report, McKinsey & Co forecasts that the autonomous vehicle (AV) market could create up to US$400bn in revenue by 2035. Despite being an uneven year for overall development—particularly following Argo AI’s closure in Q4—the events of 2022 haven’t signalled a large-scale investor retreat from the sector.

However, McKinsey’s research focused entirely on the B2C market trends: robotaxis and private passenger vehicle applications. In its base case scenario, the consultancy suggests 12% of vehicles produced will feature SAE Level 3 capabilities or higher by 2030, rising to 37% in 2035. Like the technology itself, investors in the B2C market may have to reconcile themselves to incremental gains. Argo AI’s disastrous US$827m loss in Q3 2022—prompting Ford to pull the plug—is indicative of the consequences of too little value drawn from too much investment (US$3.6bn). In order to maintain market interest in the medium term, the scope of AVs applicability will need to be broadened.