Autonomous Bus Market size is expected to grow at significant CAGR through 2027 as vehicle automation reduces operational costs, curbs pollution, and reduces the frequency of road accidents. Automated buses hold great potential in improving the level of road safety as these self-driving vehicles possess the ability to navigate independently. These buses use sophisticated onboard sensors, evaluation equipment, GPS, and radars to generate a 360-degree view of their surroundings, preventing road accidents. Technologically advanced sensors integrated with self-driving buses assist in enhancing fuel efficiency and reducing the operational cost of buses, thus supporting industry statistics.
Autonomous buses can improve the quality of transit service, increase vehicle utilization, and facilitate vehicle platooning. The transit services provided by self-driving autonomous buses are highly standardized and safe with a high level of consistency in driving compared to human drivers. These buses can form connected platoons, thereby improving transit services without additional costs. Vehicle utilization can be improved in autonomous buses. These buses also have the potential to reduce the fleet size of bus operators to an optimal level. This reduction in fleet implies a lower operational cost of fleet operators, positively influencing the autonomous bus market revenue.
The ability of autonomous buses to reduce traffic jams on crowded roads will support their growing adoption in the market. The self-regularization systems integrated with these buses adjust the speed of the bus when it arrives at the intersection, according to the status of the traffic signal. This assists in improving the transit service and prevents collision & general traffic delay.
The increasing development of smart cities in several economies will provide new opportunities for the autonomous bus market expansion. For instance, Abu Dhabi’s Economic vision 2030 aims to shift the base of the economy from natural resources to innovation and cutting-edge technologies. Through this initiative, the government will ensure the development of professionally designed well-managed urban environments with smart & autonomous vehicles to develop world-class traffic and transport systems.
Safety and security issues related to autonomous buses will impede market growth during the forecast period. These vehicles are susceptible to data leaks due to technical glitches even after the successful installation of software. Autonomous vehicles are prone to hacking, which may lead to the theft of personal data. Sensor failures may occur during drastic weather conditions. To overcome the impact of this restraint, autonomous bus market players are emphasizing on increasing their R&D spending. For instance, in 2020, Volvo Group spent over USD 468 million in its research & development activities.
The COVID-19 pandemic severely affected all industries. The worldwide lockdown significantly disrupted the supply chain & workforce and led to the shutdown of multiple factories. The slowdown has adversely affected the automobile industry, causing rapid declines in the sales of commercial vehicles. The industry is likely to witness a recovery in China, Europe, and the U.S. markets.
Based on propulsion type, the autonomous bus market share is segmented into diesel, electric, and hybrid buses. The electric segment is expected to register a high CAGR during the forecast timeline. Electric vehicles cause zero emissions and minimal noise pollution. Autonomous electric vehicles use less energy and emit no pollution as opposed to diesel. The adoption of electric buses is increasing due to government support in terms of policies and subsidies, thus serving as a growth driver for the autonomous bus industry. For instance, the Indian government has allocated total budgetary support of USD 100 billion in phase-II of faster adoption and manufacturing of hybrid & electric vehicles (FAME) scheme.
Based on sensor type, the market is segmented into camera, LiDAR, radar, and ultrasonic. The radar sensor is expected to witness high growth over the coming years. Radar sensors send out radio waves that detect objects and track their distance & speed with real-time analysis. Short- & long-range radars are installed in autonomous buses for enhanced accuracy and precision. Short-range radar sensors enable blind-spot monitoring, provide lane assistance, and are parking aids while long-range radars help in automatic distance control and brake assistance. The ability of radar sensors to identify objects during rain and fog will support their integration in autonomous buses.
Based on the level of automation, the autonomous bus market is segmented into level 1, level 2, level 3, level 4, and level 5. The level 3 automation segment is expected to hold a high market share. Level 3 automation also known as conditional automation allows the bus to manage major aspects of driving and is capable of taking full control. The integration of advanced sensor packages, hardware backups, and sophisticated software in Level 3 automated buses will drive the industry share.
Asia Pacific is expected to register a high growth rate owing to the presence of major players in the automotive industry such as Honda Motor Company, Toyota Motor Corporation, and Maruti Suzuki in Japan, China, and South Korea. Factors including an increase in population and escalating urbanization in China & India are also contributing to the market demand. In addition, the region is heavily dependent on bus transport, which is a major factor driving the autonomous bus market size.
Favorable government regulations and increasing government subsidies to invest in autonomous electric vehicles are driving the market growth in this region. For instance, China is focusing on the integration of technologies, such as Artificial Intelligence, into vehicle automation to dominate the global automobile industry. The southern Chinese city of Guangzhou has become a major testing hub for autonomous buses and cars.
The autonomous bus market is fragmented with various regional & international players operating in this market. Some of the key players include Continental AG, Volkswagen AG, Tesla, AB Volvo, Daimler AG, Proterra, Hyundai Motor Company, Toyota Motor Corporation, Robert Bosch GmbH Navya SA, and Scania AB. Market players are heavily investing in innovation & research to develop autonomous buses.
The shifting government preferences toward the adoption of autonomous vehicles to minimize the environmental impacts will support the market share. For instance, in May 2019, Nanyang Technology University, Singapore and Volvo Buses launched the world’s first autonomous electric bus. The 12-meter single-deck electric bus can accommodate 80 passengers. The bus works on AI systems to ensure maximum safety & security and is also protected with industry-leading cybersecurity measures to prevent cybercrimes.
Similarly, in February 2021, Continental AG invested in the future of chips for autonomous vehicles. The technology company has acquired a minority stake in the German-U.S. start-up, Recogni. The objective behind this acquisition is to develop highly specialized processors that will serve as an ultra-economical data booster with minimal energy consumption. These processors will enable autonomous vehicle computers to gain a rapid sense of the vehicle’s immediate surroundings, ensuring high safety.
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