Autonomous Vehicles — Who Is Now in the Driver’s Seat?

In the late 2010s, the autonomous vehicle (AV) market was the subject of considerable media attention. A wide range of companies including car manufacturers (OEMs), startups, tech giants and ride hailers all grabbed headlines by announcing plans to release their own autonomous models. However, since the COVID-19 pandemic, attention has shifted elsewhere, with many companies quietly rolling back their plans for AV development. Despite this, there has been steady progress and a change in the balance of power within the AV market over the past few years, although it has not been without its challenges.

What are the key challenges facing the development of AVs? 

Commercialising AV technology has proven more challenging than many expected. Missed deployment deadlines for level 4¹ and 5² AVs and the shutdown of high-profile AV programs (e.g. Argo AI) have contributed to industry consolidation around a smaller number of more committed players. These market trends are reflections of the challenges still facing the industry, which include: 

• Complexity of city driving — Automating the vast majority of driving scenarios has been achieved with relative ease; however, the final 0.01% of accuracy has been more difficult than anticipated. Interacting with large volumes of unpredictable human drivers in complicated built environments has proven more challenging for AV technology. Data from the California Department of Motor Vehicles (DMV) shows that interactions with other road users make up roughly 60% of disengagements³ for the top six companies, by miles tested. 

• Pressures for electrification — Pressure from governments on OEMs to electrify their vehicles has shifted their focus and R&D efforts away from full automation to shorter-term priorities to electrify. 

• Negative media attention — A small number of accidents have continued to fuel public concern over sharing the road with AVs. 

• Lack of legislation — Most countries still lack comprehensive national legislation outlining the road to full AV adoption; for example, in the US, most AV legislation is still handled at the state level. 

A changing of the guard 

Since 2019, many players within the AV market have scaled back their ambitions, which has allowed a small group to establish themselves as market leaders. OEMs are feeling the pressure to focus on shorter-term priorities such as electrification and lower-level automation, which can be built into more immediate releases, e.g. driver assistance technology. The decision by Ford and VW to shut down their joint venture, Argo AI, in 2022 shows that advanced AV development is no longer a top priority for most OEMs. 

Ride hailers like Uber and Lyft have chosen to abandon the development of their own AV technology, instead opting to partner with AV technology firms and offer their platforms as a route to market. Uber, for example, sold their AV unit to Aurora in 2020 and in 2022 announced a 10-year agreement with AV firm Motional to provide autonomous ride-hailing and delivery services.  

These developments have allowed a small number of AV firms (Cruise, Waymo and Apollo) to pull away from the pack in AV development. Waymo and Apollo are backed by Google and Baidu, respectively, while Cruise is backed by General Motors, which remains one of the only OEMs still seriously committed to developing AV technology. Over the past two years, GM and Google have expanded their testing programs with Cruise and Waymo, establishing a clear lead in terms of miles driven on public roads in California (see Figure 1). 

Commercial trials mark a significant milestone

The most significant development for AV firms has been the commencement of commercial trials since 2022. Cruise and Waymo lead the market in the US, with commercial trials active in San Francisco and Phoenix and more cities on the way. In China, commercial robotaxis are available in several major cities, with Baidu’s Apollo in the lead with deployment in more than nine cities. This marks an important milestone. For the first time, consumers are able to pay for robotaxi services via an app. Receiving legislative approval to commence these trials has not been easy. In most cases, a phased approach was taken, with firms initially starting with limited tests with a safety driver present before eventually being given the green light to charge for fully autonomous trips (see Figure 2). 

The above graphic highlights the evolution of the commercial trials. In stages S1 to S4, firms were required to have a safety driver present as they progressed from limited tests to deliveries to passenger trips. In subsequent stages A1 to A3, firms were permitted to offer the same services without a safety driver present before being allowed to charge members of the public for fully autonomous rides in stage A4. 

Regulators are starting to consider the widespread deployment of AVs 

As these commercial trials gain pace, governments are becoming more aware of the legal implications of AVs operating on public roads and starting to develop regulatory frameworks. These frameworks could expedite the approval process for future trials as they expand into other cities around the world. 

In the UK, the Centre for Connected and Autonomous Vehicles, a unit focused on the introduction of AVs onto public roads, amended the highway code in 2022 to account for Level 4 AVs. In the US, there is mounting pressure for federal-level legislation to dictate AV safety standards nationwide and take the initiative from what has been a state-level decision thus far. The EU is also keen to avoid a patchwork of different regulatory standards and in 2022 updated its General Safety Regulation to facilitate Level 4 AV testing along selected routes. Finally, in Australia, the National Transport Commission published a regulatory framework for AVs in 2022 and intends to develop legislation that will enable wider-spread AV deployment in 2026.  

What’s next for AVs? 

The power shifts within the market, the start of commercial trials and the early stages of regulatory development have illustrated that the AV industry has been making quiet but steady progress over the past three years. We now see a smaller but perhaps more focused set of players seeking to pioneer this market. 

Whilst we are a long way from AVs being commonplace on public roads, we can expect robotaxi trials to launch in more cities over the next few years. These early trials have already given us valuable insights into the future of AVs.

Endnotes
¹SEA International’s level 4 definition of automation is “total vehicle control with no intervention under certain conditions”
²SEA International’s level 5 definition of automation is “total vehicle control with no intervention under all conditions”
³The event of a safety driver taking control of the AV, either at their own discretion or being handed control by the car due to an issue being encountered