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Investing.com -- The autonomous vehicle (AV) sector is entering a new era of commercial readiness, with Bank of America estimating that the total AV market could grow to $1.2 trillion by 2040.
In a new research report, BofA analysts write that AVs are “no longer a moonshot” and are undergoing their “ChatGPT moment” thanks to advancements in AI, falling sensor costs, and a more supportive regulatory environment.
The analysts note that “AV use extends beyond the car,” citing over 200 operational AV projects globally.
The bank notes that robotaxis already operate commercially in seven cities, with 20 more expected to follow.
While passenger cars remain the largest opportunity, potentially representing a $700 billion market by 2040, BofA says the total addressable market “almost doubles to $1.2tn by 2040 if we add freight, logistics, public transport, agriculture and trucks.”
“What’s changed after 15 years of promises?” the analysts ask. The answer is said to be in key AI breakthroughs such as “digital twins to reduce on-road testing,” the use of language models to interpret decisions, and “neural networks that continuously learn how to drive” with the help of real-world data and supercomputers on wheels.
Geopolitical competition is said to be another accelerant. BofA notes that a “US-China ‘Mobility war’” is underway, with China leading in robotaxi trials and fleet expansion. The race to secure tech partnerships and supply chains is helping accelerate global adoption.
The bank adds that AVs could also help address global labor shortages in transport.
“The 4m global truck driver shortage could double by 2028,” BofA warns. AVs may offer both a technological and demographic solution, with the potential to cut taxi and rideshare costs by up to 52% per mile.