Self-driving Cars Market Size - By Level of Autonomy, By Propulsion, By Technology, By Vehicle, By Application, Growth Forecast, 2026 - 2035

Self-driving Cars Market Size

The global self-driving cars market size was estimated at USD 202.4 billion in 2025. The market is expected to grow from USD 220.8 billion in 2026 to USD 354.6 billion in 2035, at a CAGR of 5.4% according to latest report published by Global Market Insights Inc.

Rising concerns over road safety and a growing demand for automated mobility are driving the growth of self-driving vehicles. According to World Health Organization (WHO), there are over 1.19 million road deaths every year and in 2024, advanced driver assistance systems were installed on more than 55% of new cars sold worldwide.
 

Continued regulatory support for pilot programs is creating a new path for the commercialization of autonomous vehicles. In 2024, about 30 countries issued rules or guidelines for testing or deploying autonomous vehicles, and the United States saw more than 15 million miles (24 million km) of autonomous driving recorded on public roadways every year.
 

The rapid improvements in artificial intelligence, sensors, and computing capabilities have made autonomous systems more reliable. The Semiconductor Industry Association reported an increase of 12% in the number of automotive chips shipped worldwide during 2023, and the global investment into creating software that powers autonomous vehicles exceeded USD 45 billion.
 

New requirements for urban mobility and efficient logistics are creating a growing market for autonomous vehicles. According to estimates from McKinsey & Company, the ability to drive without a driver would reduce accident-related costs by 90%, and fleet operators expect to reduce the costs of operating an autonomous vehicle by as much as 30% through optimized routing and maintenance, as well as reduced reliance on a human operator.
 

Self-driving Cars Market Trends

The deployment of autonomous fleets is on the rise across many sectors, both urban, and logistics. SAE International has reported that by 2024 there are now over 12,000 level 4 and 5 autonomous test vehicles registered worldwide, which have helped to provide commercial ride-hailing and goods delivery services.
 

The ability to integrate advanced sensors with Artificial Intelligence (AI) has improved the overall reliability of autonomous systems. In 2023, the demand for semiconductors for automotive AI chips increased by 15% throughout the globe, providing the ability to conduct required functions such as detecting objects in real-time, performing predictive decision-making, and enhancing navigation accuracy; therefore, aiding in the widespread adoption of autonomous driving technology across both passenger and commercial vehicle markets.
 

There has also been significant growth within the area of regulatory approval and standardization testing for autonomous vehicles. By 2024 over 30 different countries have published official autonomous vehicle regulations, allowing pilot programs, public roadway testing, and accelerated deployment to take place in a safe manner; while at the same time establishing regulations to address the issues of liability, safety, and interoperability.
 

The combination of Autonomous vehicles and smart city infrastructure will be a significant driver of growth in the Autonomous vehicle market. The ability to use connected traffic management systems, vehicle to infrastructure communication, as well as dynamic routing will increase efficiency, reduce congestion and decrease energy usage.
 

The market for Autonomous Mobility as a Service platform continues to grow. Many urban fleet operators are reporting at least a 30% reduction in operational costs due to the successful integration of automation-related technologies. Examples of cities expanding their respective autonomous ride-hailing services include San Francisco, Singapore, and Shanghai, confirming both commercial viabilities, as well as scalability, for Automated mobility.
 

Self-driving Cars Market Analysis

Based on level of autonomy, self-driving cars market is segmented into L1, L2, L3, L4 and L5. The L3 segment dominates the market with 46% share in 2025, and the segment is expected to grow at a CAGR of 5.2% from 2026 to 2035.
 

• L3 autonomous cars allow their drivers to relax while maintaining control over the vehicle. A recent industry survey found that in 2024 more than 65% of autonomous test pilots were designed with L3 capabilities and were built by both high-end and entry-level manufacturers, thus supporting the continuation of the market.
   
• L2 systems continue to grow in popularity since they are more affordable and have fewer legal hurdles to overcome than the more advanced systems. In 2024, over 55% of all newly manufactured vehicles globally offered L2 capabilities including adaptive cruise control and lane-keeping technology supporting volume-based market stability.
   
• L4 autonomous vehicles are becoming increasingly popular within specific environments like robotaxis and warehouses. Also, in 2024 public road testing of L4 vehicles in the United States surpassed 15 million miles, providing support for further commercialization, though not as many people are purchasing them privately.
   
• Currently, L5 autonomous vehicles are still in their infancy stage. In order to achieve L5 solutions, extensive testing standards and government approvals will need to be in place which will keep them from having a significant share of the market from 2025 onward.
   

Based on propulsion, the self-driving cars market is divided into ICE, electric and hybrid vehicles. The ICE segment dominates with 72% market share in 2025 and is expected to grow at a CAGR of 4.8% from 2026 to 2035.
 

• Self-driving vehicles with an internal combustion engine (ICE) are the first to be launched because they have an established vehicle and are easier to add the automation system to, compared to electric automated vehicles.
   
• Electric self-driving vehicles have become the second largest segment because they support software-based architectures for a large variety of sensors and central processor capability, while ICE vehicles use mechanical characteristics for their speed, torque, etc. The electric self-driving vehicle platform has packaging flexibility, energy-saving advantages, and complete compatibility with self-driving software stacks.
   
• The hybrid self-driving vehicle segment represents the transition between ICE and electric vehicles, providing extended ranges and lower emissions, coupled with reliable operation in mixed-use environments where there is a mix of infrastructure and regulations in terms of autonomous vehicles.
   
• The commercialization of self-driving vehicle systems and the development of a complete vehicle ecosystem depend on the countries' state of development and infrastructure development.
   

Based on vehicle, the self-driving cars market is segmented into compact cars, mid-size cars, and SUVs & luxury cars. The mid-size cars segment dominates with 35.6% market share in 2025.
 

• Compact cars primarily address urban mobility needs, where autonomous features support congestion management, parking assistance, and shared mobility applications. Compacts have lower cost of system integration, and, in the case of average size markets, pilot programs exist where they are being used to provide services in the context of automated ridesharing and last-mile transit services in dense urban environments.
   
• In the market for self-driving vehicles, mid-size cars represent the largest segment due to their balanced vehicle architecture, cost effectiveness and broad acceptance by consumers. Mid-size vehicles provide ample room for the integration of advanced sensor suites, onboard computing and back-up systems for higher levels of autonomy.
   
• Luxury cars (i.e., SUVs and large sedans) provide significant marketing advantages in both terms of pricing tolerance and high adoption rates of advanced autonomous features. Luxury brands will have significantly more flexibility to offer multiple sensor and power supply options, as well as offering highly complex human interface systems. They will be well positioned to showcase fully autonomous driving systems as part of a more comprehensive premium mobility experience.
   

Based on application, the self-driving cars market is divided into personal use, shared mobility, logistics and delivery, public transport and others. Personal use segment dominates with 46% market share in 2025.
 

• Personal use applications focus on enhanced driving comfort safety assistance and gradual autonomy adoption. Adoption by consumers is cautious but emphasizes safety reliability and human oversight, along with the introduction of premium features, which are offered in privately owned passenger vehicles.
• Autonomous driving has the potential to be commercialized on a large scale through the utilization of Shared Mobility as a pathway to achieve this objective. Fleet based robotaxi operations are advantageous to the customer as they have higher utilization rates than conventional vehicles, are monitored centrally and use fixed operating zones to facilitate faster deployment and optimize costs.
   
• Logistics and Delivery applications are focused on improving the operational efficiency of the logistics and delivery sector through enhanced route predictability and reduced labor requirements. In particular, autonomous systems are well-suited to performing the repetitive tasks that occur at the 'last mile' of delivery and between Hubs, as they provide more consistent delivery outcomes and maximize asset utilization.
   
• The use of Public Transport by the introduction of Autonomous Buses and Shuttles on Fixed Route networks is designed to improve the level of safety and redundancy in regard to transport, whilst facilitating the integration of autonomous transit systems with Urban Mobility Systems, thereby enabling the scaling of Autonomous Transit Solutions to meet the growing demand for Autonomous Transit options.
   

US dominates the North America self-driving cars market accounting for 83% share and generating USD 33.6 billion revenue in 2025.
 

• There is an increase in the market for self-driving cars in the United States with rapid growth through a combination of significant amounts of investment and regulatory support, projected growth due to the technological development and commercial usage that will occur over the coming decades.
   
• The Federal Guidelines (such as the NHTSA AV STEP, DOT Guidelines) provide a framework for states to be able to quickly test and operate these types of vehicles on State Roads, removing regulatory burdens to operate across state lines, create a fast track to scaling autonomous fleet deployment.
   
• The development of Commercial Robotaxi services has already begun in many cities throughout the US, with Businesses like Waymo, Tesla and Uber expanding coverage and have provided millions of rides with plans to expand into other metropolitan areas.
   
• The general acceptance of this type of service remains mixed, and some people still question their safety and whether or not they would be comfortable riding in them. Many surveys still show there is a sizeable portion of the population who are questioning whether they would use these services, however, as the level of awareness and interest continues to grow so does the level of acceptance.
   
• Overall, the US self-driving car market is benefitting from significant collaboration between OEMs, technology companies and regulators, while OEMs continue to invest heavily in developing the technology/AI, camera systems and software that will help commercialize the use of passenger and Commercial Fleet Applications of the Self-Driving Car Technology.
   

Germany dominates Europe self-driving cars market growing with share of 25% in 2025.
 

• The German self-driving vehicle industry shows a steady growth trend due to the country's strong industrial infrastructure and research capacity that support the development and testing of self-driving vehicle technology. Through 2030, the revenues generated from the German self-driving vehicle sector will grow significantly due to advances in the development and application of autonomous vehicles and an evolving regulatory environment.
   
• The regulatory structure in Germany provides opportunities for testing of autonomous vehicles (AV) and deployment of AV technology at Level 3 of the SAE Levels of Automation (SAE levels have been established to provide comprehensive communication about automation technologies).
   
• The German automotive manufacturers are in the process of introducing advanced automation technologies into production-level AVs, preparing for widescale deployment as testing and validations continue.
   
• The number of technology collaborations (partnerships) and proof-of-concept trials between automotive manufacturers, technology companies, and global AV service providers is increasing in Germany to support the development of robotaxis and commercial AV fleets in urban areas.
   
• The public acceptance of AV technology in Germany reflects an increasing number of residents supporting the use of AV for personal and public transportation, which contributes to increased consumer confidence and ultimately an expanded market for AV technology and commercial delivery of AV services.
• AV services already exist in urban environments such as Hamburg, through services such as logistic shuttle service and some fleet operations, demonstrating the feasibility of the controlled operating environments.
   

China dominates the Asia Pacific self-driving cars market, showcasing strong growth potential, with a CAGR of 6.4% from 2026 to 2035.
 

• As the China self-driving car market grows rapidly with much government support and extensive pilot programs across major urban areas, similar to other self-driving technologies, the industry is expected to see tremendous growth as more autonomous vehicle revenue reaches levels that will significantly increase over the next ten years.
   
• In 2025, regulatory progress accelerated with the Chinese government granting approvals of the first batch of Level 3 autonomous driving vehicles from domestic Chinese manufacturers. This was a significant milestone in proving that automakers were prepared to produce vehicles that could operate at some level of conditional autonomy on public roads.
   
• The level of domestic investment in advanced technology related to intelligent driving has been extensive. Many new vehicles manufactured and sold in China today are equipped with either some type of assisted driving or fully autonomous driving capabilities. Furthermore, many new passenger vehicles manufactured today have at least Level 2 and/or above features installed, thereby increasing the level of acceptance by consumers and creating a greater likelihood of widespread use of these technologies.
   
• There are many leading developers of autonomous driving technology and deployers of robotaxi and fleets across China's larger urban areas. Several of these companies, which include major players in the autonomous vehicle industry including Baidu, Pony.ai, and WeRide are actively deploying services in multiple urban areas and increasing the size of their operational pilot programs to increase the probability of becoming commercially viable.
   
• Market growth will be driven by the increasing integration of connected roadways and the deployment of smart infrastructure initiatives that support the use of autonomous mobility and the expansion of 5G technology, enabling the exchange of greater volumes of data and the ability of the vehicles to navigate in real time and operate safely in an automated fashion.
   
• The primary challenges facing this market will be due to differing regional regulations, as well as constraints on the use of driverless cars in highly congested traffic conditions (such as those that are currently being tested outside of the larger cities in China).
   

Brazil leads the Latin American self-driving cars market, exhibiting remarkable growth of 2.3% during the forecast period of 2026 to 2035.
 

• The Brazil market is on the rise and attracting attention from federal and private sector entities. Early rollout of autonomous vehicles has taken place mainly through pilot programs and partnerships with technology companies in different urban areas.
   
• As regulations are beginning to adapt to the needs of testing and implementing autonomously operated systems, many government bodies are establishing regulations on safety, liability and certifications so that autonomous vehicles may be put into action with responsibility on public roads in a way that represents due diligence.
   
• Current urban mobility initiatives are generating interest in autonomous passenger vehicle solutions as well as shared mobility services with several large cities actively evaluating and testing these alternatives in order to reduce traffic congestion and improve the effectiveness of urban transportation systems.
   
• There are now also early commercial applications being developed for logistics and delivery systems. These early commercial applications are being successfully incorporated into logistics and delivery systems by utilizing controlled routes and management of fleets to enable the integration of autonomous systems but limit their impact on risk.
   
• However, there are continuing concerns around the lack of readiness of infrastructure to support the adoption of autonomous vehicles and the public acceptance of these technologically advanced vehicles. Issues related to the road conditions, mixed traffic environments and level of public knowledge regarding autonomous technology will have a direct impact on the speed at which autonomous systems will be adopted and will require collective efforts to coordinate a successful rollout of these vehicles.
   

UAE to experience substantial growth in the Middle East and Africa self-driving cars market in 2025.
 

• In the United Arab Emirates, the market is quickly growing due to both supportive regulation and testing frameworks in place as well as a strategic alliance between government and global firms that develop autonomous technology. With the strong momentum in regulation, the UAE has established itself as a regional leader in the implementation of smart mobility.
   
• The Dubai Autonomous Transport Strategy has a goal to convert 25% of all trips in Dubai to autonomous transport by the year 2030 through the use of vehicle and infrastructure systems as well as testing corridors for robotaxi and autonomous fleets throughout urban centres.
   
• Commercially available models of autonomous mobility services have been implemented in areas of Abu Dhabi such as Yas Island where the operation of robotaxis by Uber and WeRide has transitioned to 100% driverless operations, which reflects both regulatory approval of the technology and consumer familiarity with autonomous transportation options.
   
• Currently, there are pilot programs being run by Uber Eats experimenting with driverless delivery vehicles in Masdar City, further demonstrating the growth of autonomous mobility beyond just passenger transportation. This expansion into logistics and last mile delivery services is supported by collaboration between government and the private sector to increase the efficiency and sustainability of the logistics industry.
   
• It appears that consumer readiness for autonomous vehicles in the UAE is very high, as surveys of the UAE population indicate a high percentage of residents are comfortable and receptive to self-driving technology. The ongoing developments in public acceptance, infrastructure and regulation all support the advancement of autonomous automotive deployment.
   

Self-driving Cars Market Share

• The top 7 companies in the self-driving cars industry are Volkswagen, Toyota Motor, Ford Motor Company, General Motors, Daimler Mercedes-Benz, Tesla, and Honda Motor, contributed around 62% of the market in 2025.
   
• Volkswagen  has developed electric vehicle and software defined architecture (SDA) platforms to enhance how people use their cars autonomously. With its extensive manufacturing capability and strong reputation as a global automaker, VW continues to integrate Level 3+ Autonomous Technology into new passenger and commercial vehicles.
   
• Toyota Motor  is working to develop safety centric autonomous systems that allow them to deploy autonomous technologies gradually across both the passenger and commercial vehicle sectors. The company's strength is its ability to combine advanced sensor technology with the AI features necessary to provide safe and reliable autonomous driving experiences as well as expansive research into conditional and full autonomy.
   
• Ford Motor Company is committed to building everything from fleet management platforms to autonomous ride-sharing services based upon scalable autonomous vehicle technology. To achieve this, they are creating, with the use of cloud-based software, connectivity capabilities, and collaboration with technology companies, to promote the rapid development of both passenger and delivery autonomous vehicles.
   
• General Motors has developed its fully autonomous electric vehicle business through the Cruise. GM is focused on establishing a software safety validation process and conducting large-scale public road testing on a regular basis to increase the number of autonomous vehicles operating in North America and other parts of the world.
   
• Daimler  Mercedes-Benz, as the industry leader in premium autonomous vehicles and commercial applications, has achieved this status through its emphasis on advanced driver assistance systems, conducting thorough testing programs, and entering into partnerships with technology companies to develop autonomous fleet and robotaxi services.
   
• Tesla focuses on creating complete solutions for electric vehicles that incorporate both self-driving autonomous capabilities and OTA (over-the-air) software updates into their EV models. Their approach also utilizes AI developed in-house along with sensor technology and real-time data from their vast network of electric vehicles on the road to speed up the commercialization process for self-driving EVs.
   
• Honda Motor is adding autonomous features to passenger cars and other mobility products, while integrating all aspects of this technology through the integration of their global engineering resources with an emphasis on safety and technology partnerships to enable them to continue to develop autonomous functionality across the diverse range of vehicles they manufacture.
   

Self-driving Cars Market Companies

Major players operating in the self-driving cars industry are:

• BMW
• BYD
• Daimler (Mercedes-Benz)
• Ford Motor Company
• General Motors (GM)
• Honda Motor
• Hyundai Motor
• Tesla
• Toyota Motor
• Volkswagen
   
• Autonomous vehicles, or self-driving cars, are increasingly being deployed as a result of advances in various technologies including Artificial Intelligence (AI), sensor technology, and vehicle-to-vehicle (V2V) communication capabilities. Urbanization, increased traffic congestion, and the desire for improved safety on our roads have created an environment conducive to increased investment by both vehicle manufacturers and government agencies in the development of self-driving vehicles.
   
• A combination of regulatory guidelines, pilot testing programs, and partnerships between Original Equipment Manufacturers (OEM) and technology companies is helping support the continued growth of the self-driving car market.
   
• Currently, passenger vehicle manufacturers, commercial fleet operators, and shared mobility service providers are adopting the technology at the highest rate. Infrastructure improvements and public acceptance will play a critical role in achieving extensive use and long-term commercial success for self-driving cars.
   

Self-driving Cars Industry News

• In December 2025, Volkswagen initiated a new phase of public road testing for its Gen. Urban autonomous research vehicle in Wolfsburg. The vehicle, designed without a steering wheel or pedals, is being tested in complex urban traffic scenarios including roundabouts and mixed residential areas to validate passenger experience and trust in fully autonomous mobility.
   
• In December 2025, BYD announced the completion of over 150,000 kilometers of Level 3 autonomous driving validation tests on expressways in Shenzhen. The company also confirmed its inclusion in China's national pilot program for L3 Intelligent Connected Vehicles, conducting tests in challenging conditions such as night driving and road construction zones to prepare for mass production.
   
• In December 2025, Changan Automobile was granted China’s first-ever license plate for Level 3 autonomous driving public road testing in Chongqing. This regulatory milestone allows the company's "Deepal" and "Arcfox" (in partnership with Huawei) models to operate conditionally automated systems on designated public highways, legally permitting drivers to take their hands off the wheel.
   
• In December 2025, Waymo confirmed it is in advanced talks to raise additional capital at a valuation near $100 billion, following the successful expansion of its robotaxi operations to Austin and Atlanta earlier in the year. The company also revealed plans to launch commercial autonomous services in London and Tokyo in 2026, targeting over 1 million paid trips per week globally.
   
• In December 2024, Mercedes-Benz obtained regulatory approval from the German Federal Motor Transport Authority (KBA) to increase the top speed of its DRIVE PILOT system to 95 km/h on German autobahns. The update features a redundant system architecture for steering, braking, and onboard electrical systems to enable safe, conditionally automated (Level 3) driving in flowing traffic.
   

The self-driving cars market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue (USD Mn) and volume (Units) from 2022 to 2035, for the following segments:

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Market, By Level of Autonomy

• L1
• L2
• L3
• L4
• L5

Market, By Propulsion

• ICE
• Electric
• Hybrid vehicle

Market, By Technology

• Camera-Based Systems
• Radar-Based Systems
• LiDAR-Based Systems
• Sensor Fusion Systems

Market, By Vehicle

• Compact cars
• Mid-size cars
• SUVs & luxury cars

Market, By Application

• Personal use
• Shared mobility
• Logistics & delivery
• Public transport
• Others

The above information is provided for the following regions and countries:

• North America
  • US
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
  • Netherlands
  • Sweden
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Singapore
  • Thailand
  • Indonesia
  • Vietnam
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • South Africa
  • Saudi Arabia
  • UAE
  • Turkey